The freight industry showed solid gains in the number of shipments and amount spent by shippers in the third quarter of 2020 after three consecutive quarters that showed a downturn in both shipments and spend.
The Q3 2020 U.S. Bank Freight Payment Index, a quarterly analysis of national shipments and spend, shows that shipments in the third quarter of 2020 increased 6% (compared to a drop of 7.6% in the second quarter of the year), and spend was up 14.6% (vs. a decline of 13.7% in Q2 2020).
The U.S. Bank National Shipment Index increased 6% from the second quarter of 2020 – the largest quarterly gain since the second quarter of 2019.
During the summer and early fall (July, August and September), demand across the U.S. surged for household goods – items for home-improvement stores, grocery stores, and e-commerce – which resulted in an increase in the amount of goods shipped. In addition, retail inventories became depleted over the summer and retailers needed more goods to restock, which also gave carriers a boost.
However, some parts of the industry, particularly tanker trucks – 60% of which haul energy or chemical products – continued to struggle as a result of lower energy consumption and production, as well as soft chemical output.
The U.S. Bank National Spend Index improved 14.6% from the second quarter of 2020. Despite the increase, the spend index was off 7.3% from a year earlier. This is due to the COVID-19 overall impact on economic activity, which impacts freight.
The increase in spending in the quarter was due to several factors:
Shipments were up in all regions except the Southwest during the third quarter. Spend was up double digits in all regions but one, led by a more than 21% increase in the West.
“We are seeing a K-shaped recovery – when different parts of the economy recover at different rates,” said Bob Costello, senior vice president and chief economist for the American Trucking Associations. “Sales at grocery stores and home improvement stores are strong, and home construction is robust. But other sectors – travel, entertainment and oil production – are down.”
“We are now entering the busiest time of the year – a lot of freight is moved from the end of September into December in the rush to get stock to the stores for the holidays,” said Bobby Holland, U.S. Bank vice president and director of Freight Data Solutions. “With even more freight to be hauled, it should be a solid peak season for both shippers and carriers.”
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 more than $28.8 billion in 2019 for some of the world’s largest corporations and government agencies.