The US Bank Freight Payment Index is a quarterly publication that represents freight shipping volumes and $31.4 billion in freight spend in the truckload and less-than-truckload sectors on a national and regional level.
In Q2, both the US Bank National Shipments and Spend Indexes increased. This indicates that the national truck freight industry is improving, implying that the economy’s recovery is gaining traction.
However, despite a quarterly 4.4 percent and annual 6.8 percent improvement in the shipments index compared to the same quarter last year, cargo quantities are still down 6.5 percent.
The following is taken from the quarterly report:
“In the second half of the year, as industries ramp up output in response to growing demand, truck freight demand will rise as well. Meeting such demand in the face of one of the worst supply shortages in history will challenge the motor carrier business. Increased new driver training and fast-rising remuneration will assist, but getting more drivers into the market will take time.”
The West continues to lead the way, with imports reaching historic highs.
In the second quarter, all regional shipping indicators increased. This contrasted with the statistics from Q1, which showed that different parts of the country and sectors recovered at varying rates from the pandemic. According to the United States Bank,
- The freight markets in the Midwest and Northeast are recovering at a slower pace than those in the South and West.
- The West experienced the biggest quarter-to-quarter growth (7.1 percent), while the Northeast experienced the smallest (1.5 percent ).
- The Southeast saw the most year-over-year gain of 20%, while the Midwest saw the biggest drop of 2.1 percent.
- With quarterly rises ranging from 7.9% in the Midwest to 14.6 percent in the Northeast, all areas saw sequential and double-digit year-over-year spending increases.
- After a 10.2 percent drop in the first quarter of 2021, the West Regional Shipments Index increased by 7.1 percent in the second quarter. Shipments are up 12.1 percent over the same period last year. Solid retail sales, strong home development, and strong import container volumes, which were up 30% year over year in June, are driving this.
As shops seek to import more consumer items, almost a third of imports from Asia arrive in the ports of Long Beach and Los Angeles. In single-family dwelling starts, the West Region ranks second (25 percent of yearly openings). For flatbed carriers, it is the most freight-intensive of all residential dwellings.
According to the Census Bureau’s June data, the single-family house starts in the West Region are up 27 percent year over year. Despite flat sequential volumes in June, 197,000 more single-family dwellings were built in Q2 than in the same quarter in 2020, representing a 32 percent increase.
Spot and contract rates have been rising for West Coast carriers. However, they are now being limited by port congestion, unloading delays, and, more lately, intermodal capacity constraints. As a result, spot prices in eCommerce routes, such as Los Angeles to Phoenix, have dipped below $5.00/mile this week. This contributed to a 13.9 percent increase in the West Regional Spend Index this quarter and a 51.5 percent increase year-over-year, highlighting how constrained capacity is for West Coast shippers.
What was the performance of other regions in the second quarter?
During the second quarter, the truck freight business in the Southwest was booming. Compared to the first quarter of this year, shipments climbed by 6.5 percent, while spending increased by 34.1 percent.
Shipments in the Midwest, on the other hand, increased by only 2% in the second quarter but fell by 2.1 percent year over year. This was owing to continued microprocessor and other supply chain input shortages, which caused auto production restrictions.
With shipments up 1.8 percent in Q1 but down 1.8 percent year-over-year, the Northeast Region had a similar result to the Southwest.
The Southeast Region had the biggest yearly gain in shipments among the five regions, increasing by 5.8% in Q2 and by a whopping 20% year over year.
