The U.S. Bank Freight Payment Index recorded gains in both the volume of freight shipments and the spending upon them in the fourth quarter of 2017, with the Southwestern U.S. experiencing most of that surge.
Spending for trucking services advanced by the highest rates so far this decade, according to U.S. Bank, which compiles its index via data from transactions processed through its U.S. Bank Freight Payment system across a range of industries, including automotive, manufacturing, food and retail.
“The growth in shipments for the fourth quarter was solid, just not quite the torrid pace of the previous two quarters,” noted Bob Costello, chief economist for the American Trucking Associations (ATA), who provides quarterly analysis and expert commentary on the index results.
“This matches the broader economic picture, where gross domestic product is expected to show a slowing down for the fourth quarter,” he said. “The concurrent strength in spending can be traced in part to solid demand, but also to a driver shortage accentuated by the new federal requirement that trucks be equipped with electronic logging devices, or ELDs, to track driver hours-of-service, which took effect in December.”
However, the volume of shipments increased by the smallest amount of any quarter in 2017 – fitting with expectations for “economic output deceleration” during the final quarter of the year, U.S. Bank said.
Other highlights from the fourth quarter 2017 index reading include:
- The National Spending Index jumped 12.5% from the third quarter and 24.8% over the same quarter a year earlier. The two gains were both records for the index dating back to 2010.
- The National Shipments Index increased just 1.6% during the quarter, significantly below the 5.8% and 3.3% gains of the second and third quarters, respectively. Still, it was the best for fourth quarter of any year since 2014, and notably better than fourth quarter of 2016, when the index fell 4%.
- Truck shipments were quite mixed by region during the quarter, ranging from a drop of 1.4% in the Midwest to a surge of 9.1% in the Southwest.
- All regions saw double-digit gains in spending, the largest jump coming in the Northeast (16%) and the smallest being the Southeast (just under 11%).