The freight industry continued its growth streak in the fourth quarter of 2020, with solid gains in both the number of shipments and the amount spent by shippers.
The Q4 2020 U.S. Bank Freight Payment Index, a quarterly analysis of national shipments and spend, showed that shipments in the fourth quarter of 2020 increased 5.3% (vs. a gain of 6% in the third quarter of 2020) and an increase in spending of nearly 20% (vs. an increase of 14.6% in Q3 2020).
The gains in the second half of the year came on the heels of three consecutive quarters that showed a downturn in both shipments and spend – largely due to the impact of COVID-19 on economic activity.
After rising 11.3% during the second half of the year, the U.S. Bank National Shipment Index – up 5.3% -- was at its highest level since the third quarter of 2019.
The increase can be attributed to robust growth in certain parts of the economy, including record levels of shipments for e-commerce and retail goods, and an increase in the shipment of construction materials for new homes (driven by low mortgage rates). However, some sectors of the economy are recovering more slowly, including energy production and manufacturing, which tempered growth.
The U.S. Bank National Spend Index was very strong during the last quarter of the year, surging 19.7% -- a 14% increase from the fourth quarter of 2019 – the largest year-over-year gain since Q2 2018.
The increase in spending in the quarter was due to several factors:
For the first time since the third quarter of 2017, every region posted gains in both shipments and spend during the final quarter of 2020. Rates also increased significantly in every region, and increases in spending were significantly larger than increases in shipments.
“Parts of the economy are doing really well,” said Bobby Holland, U.S. Bank vice president and director of Freight Data Solutions. “Many Americans did not go on vacation or spend money on dining out and instead spent money online. The retail and e-commerce sectors are fueling the recovery and tightening capacity in the process. Other parts of the economy are still struggling – including manufacturing activity and the transport of goods related to energy production.”
Bob Costello, senior vice president and chief economist for the American Trucking Associations, said, “In preparation for 2021, carriers are continuing to raise pay for drivers to help address the driver shortage. We also are seeing many carriers buying new trucks to turn over older fleets but also to recruit new drivers.”
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 $29.7 billion in 2020 for some of the world’s largest corporations and government agencies.