U.S. Bank Freight Payment Index: Shipments, spending slow in Q1 2021

April 21, 2021

The U.S. Bank Freight Payment Index is a quarterly analysis of national shipments and spend.

The national truck freight market softened in the first quarter of 2021 – the result of severe winter weather and supply-chain shortages. 

The Q1 2021 U.S. Bank Freight Payment Index, a quarterly analysis of national shipments and spend, showed that shipments in Q1 2021 contracted 8.3% (vs. a gain of 5.3% in Q4 2020) and spending was down 4.7% (vs. an increase of nearly 20% in Q4 2020). 

Freight volume normally slows during the first quarter of the year, but this quarter the drop was impacted by several forces, including severe weather in February across much of the country and a disruption in the supply of microchips for auto and truck manufacturers.

Shipment Index 

The U.S. Bank National Shipment Index shrank 8.3% this quarter after increasing a combined 11.3% in the third and fourth quarters of 2020. Severe weather impacted construction, retail, factory output and energy production, slowing supply chains and making it difficult for people to work. 

Spend Index 

The U.S. Bank National Spend Index contracted 4.7% this quarter after jumping nearly 20% in Q4 2020 and 14.6% in Q3 2020. 

Despite a drop in spending this quarter, overall spend remains high due to several factors: 

  • Driver shortage: The pool of qualified drivers continues to shrink. According to the U.S. Department of Labor, for-hire trucking employment, which includes all types of occupations but is dominated by truck drivers, was down more than 40,000 workers in the first quarter of 2021 compared with the same quarter in 2020.
  • Winter weather: Severe weather across the U.S. reduced the number of trucks on the road, as many were idled by the weather. This meant fewer trucks to move goods, which pushed up pricing. 
  • High fuel prices: Winter storms in Texas brought many production facilities offline for extended periods, and OPEC made the decision not to boost production. Both led to significant increases in diesel fuel prices. 

Regional data 

All regions posted declines in the National Shipment Index, both quarter-to-quarter and year-over-year with the exception of the West. In terms of spending, all regions posted declines from the fourth quarter but gains from a year earlier. 

  • Northeast: Shipments were off 5.8% vs. the previous quarter, negatively impacted by storms and their impact on home construction. New housing starts for multi-family units fell by about 20% from a year earlier. Spending fell just 3% in the quarter. 
  • Southeast: Truck freight was down 5.8% in the quarter vs. Q4 2020, and 2.5% from a year earlier.
  • Southwest: Shipments contracted 6.4% from Q4 2020, largely due to an ice storm in Texas – a huge truck freight market in the Southwest. Many factories were closed, and energy output slowed significantly. The Spend Index was down 4% from the fourth quarter, but up 4.8% year over year. 
  • West: Shipment volumes fell 10.2% from Q4 2020, and the spend index fell 12.6% over Q4 2020.  Imports into West Coast seaports were very strong, but reduced export volumes (due to a lack of international shipping containers) hurt freight in the region. In addition, storms in the West (particularly in the Rocky Mountains) also hurt freight volumes. 
  • Midwest: Shipment volumes dropped nearly 11% –  the largest drop in two years – due to severe winter weather, auto plant production slowdowns due to supply shortages, a decline in agriculture exports, and a slight drop in single-family housing starts. The Spend Index fell just 2.4% vs. Q4 2020.  

“The freight industry hit an economic recovery ‘speed bump’ during the first quarter,” said Bobby Holland, U.S. Bank vice president and director of Freight Data Solutions. “Winter storms, supply-chain disruptions and a continued driver shortage all contributed to tight capacity. However, headed into the spring and summer, with many Americans vaccinated, government stimulus and increased economic reopening, we anticipate increased spending and increased factory output – leading to rising freight volumes.”

Bob Costello, senior vice president and chief economist for the American Trucking Associations, said, “A lot of the issues in Q1 were weather-related and therefore temporary. We’re still predicting growth in the coming year.” 

To see the full report including in-depth regional data, visit the U.S. Bank Freight Payment Index website. For more than 20 years, organizations have turned to U.S. Bank Freight Payment for the service, reliability and security that only a bank can provide. The U.S. Bank Freight Payment Index measures quantitative changes in freight shipments and spend activity based on data from transactions processed through U.S. Bank Freight Payment. The business processed $31.4 billion in 2020 for some of the world’s largest corporations and government agencies.

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