Biggest quarterly drop in shipments since Q1 2021, third quarter volume contraction would have been steeper if not for strong uptick in the Southwest region.
MINNEAPOLIS (October 19, 2022) – Truck freight volume contracted 2.6% compared to the second quarter and 4.9% year-over-year, according to the third quarter 2022 U.S. Bank Freight Payment Index released today. The Index revealed spending by shippers also dropped in the third quarter.
This was the steepest quarterly drop in shipments since the first three months of 2021. A strong uptick in freight truck activity in the Southwest region prevented deeper declines. Volume in the region jumped 5.8% over the second quarter and 6.6% year-over-year.
“With inflation elevated, consumers are spending more on household staples at the expense of other products that are moved by freight truck. This transition, as well as weaker home construction activity, is impacting truck freight volumes,” said Bob Costello, the American Trucking Association’s senior vice president and chief economist. “High levels of oil production in the Southwest, as well as strong truck freight volumes with Mexico, helped avoid a much worse quarter for shipments.”
Spending by shippers also contracted in the third quarter, dropping 2.4% compared to the second quarter. This was only the second quarterly decrease in spending since Q3 2020. The Midwest region had the largest quarterly decline in spending while the Southwest was the only region to experience a quarterly increase. When compared with the third quarter of 2021, overall Q3 2022 spending was still up 10.6%.
“Lower freight volumes, as well as dropping diesel prices in the quarter, led to the linked-quarter spending contraction,” said Bobby Holland, U.S. Bank vice president and director of Freight Data Solutions. “Even with the third quarter dip, spending by shippers is still at near record levels for the history of our index.”
Linked quarter: -4%
Year over year: -3.5%
Linked quarter: -5.3%
Year over year: 6.5%
The Midwest hasn’t seen a year-over-year increase in shipment volume since Q1 2020. Slowing new home construction – down 15% from the same period last year, according to the Census Bureau – could be a factor in weaker truck freight volume.
Linked quarter: -0.4%
Year over year: -4.6%
Linked quarter: -0.8%
Year over year: 11.6%
While shipments in the West contracted in the third quarter, the region had the second-best results behind the Southwest. Softer port activity in the West could have factored into the contraction. The drop in spending was only the second quarterly decrease in the last six quarters.
Linked quarter: -10.4%
Year over year: -7.1%
Linked quarter: -1.4%
Year over year: 11.9%
The -10.4% drop reversed a 7.3% second quarter increase in Northeast shipments. The -1.4% drop in spending – much less than the drop in shipments – suggests that capacity remains somewhat constrained in the Northeast.
Linked quarter: -1.1
Year over year: -10.5%
Linked quarter: -0.1%
Year over year: 10.2%
This was the fifth straight quarter shipments have contracted in the Southeast. Spending dropped, but at a lower percentage than the national figures.
Linked quarter: 5.8%
Year over year: 6.6%
Third quarter: 1.7%
Year over year: 24.6%
The Southwest had far higher increases in shipments and spending than other regions. Solid crude oil production, strong truck freight volumes with Mexico and increases in imports to the region helped increase volume and spending in the region.
To see the full report including in-depth regional data, visit the U.S. Bank Freight Payment Index website. For more than 22 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 $37 billion in 2021 for some of the world’s largest corporations and government agencies.
Todd Deutsch, U.S. Bank Public Affairs & Communications
email@example.com | 612.303.4148
About U.S. Bank
U.S. Bancorp, with approximately 70,000 employees and $601 billion in assets as of September 30, 2022, is the parent company of U.S. Bank National Association. The Minneapolis-based company serves millions of customers locally, nationally and globally through a diversified mix of businesses: Consumer and Business Banking; Payment Services; Corporate & Commercial Banking; and Wealth Management and Investment Services. The company has been recognized for its approach to digital innovation, social responsibility, and customer service, including being named one of the 2022 World’s Most Ethical Companies and Fortune’s most admired superregional bank. Learn more at usbank.com/about.
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