Dive Brief:
- U.S. Bank shipments and spending indices dropped 21% year over year in Q3, signaling that “any recovery will be slow,” according to a report the bank released last week.
- Despite signs of optimism for trucking market recovery, challenges remained regarding shipments and spending, the bank said.
- “Over the last two quarters, volume and spend contractions have lessened, but we’re waiting for clear evidence that the market has reached the bottom,” Bobby Holland, director of freight business analytics at the bank, said in a news release.
Dive Insight:
Compared to Q2, shipments declined 1.9%, and spending dropping 1.4%. Despite the downward slide, the indices suggested a slower pace of losses, analysts said.
“It’s a positive sign that spending contracted less than shipments. With diesel fuel prices lower, the fact that pricing didn’t erode more tells me the market is getting healthier,” Bob Costello, SVP and chief economist at the American Trucking Associations, said in the bank’s news release.
While the shipment index has been declining since Q2 2022, the latest change was the smallest quarterly sequential drop in over a year, too, U.S. Bank also noted.
Whether ups and downs become a trend remains to be seen. Analysts and companies have presented mixed views on what’s ahead this year.
DAT Freight & Analytics noted on a market update last week that new contract renewal rates rose 0.9%, suggesting potential promise for carriers and more of an inflationary market for shippers.
But a dry van spot premium ratio showed spot rates were 9% below contract rates as of mid-October, reflecting a soft spot market.
Inflation has crept into the overall mix for shippers regarding dry van in October, but that hasn’t yet happened in reefer and flatbed, DAT Group Product Manager Chad Kennedy said Tuesday.
