Freight market conditions continued to slog along in Q4, according to U.S. Bank Freight Payment Index data.
Spending and shipments were relatively flat for all of 2024, but that also meant discouraging drops in those metrics each quarter compared to 2023. Year over year, Q4 spending declined 22%, and shipments decreased by nearly 16%.
The sluggishness came from cyclical challenges as well as structural shifts from private fleet expansions, according to the index report that was released last week.
"A reboot in the truck freight market is slower than anticipated for both motor carriers and shippers alike, and it is becoming clearer that there are both cyclical and structural challenges remaining in the truck freight market," the U.S. Bank index report said.
Not only did some private fleets grow, but some shippers also created new ones, the report noted.
But increased size in private fleets is more of a secondary factor compared to lackluster manufacturing output, according to Michigan State University supply chain professor Jason Miller, interim chair of the school's Department of Supply Chain Management.
Industrial conditions have demonstrated encouraging signs recently, carriers such as Old Dominion Freight Line and XPO have noted. Additionally, the Institute for Supply Management's Purchasing Manager's Index flipped to expansion territory in January, the first time in over two years.
"Historically, several months of expanding new orders have preceded improvements in trucking market conditions," Miller wrote Thursday. "This said, trucking demand has yet to show a true sustained increase."
Some signs of improvement have been happening. The U.S. Bank freight index reported that capacity seemed to be tightening and spending per truck appeared to be up.
Meanwhile, dry van spot rates have been growing year over year, while contract rates have been relatively flat in recent months, according to DAT Freight & Analytics data.
But from September 2024 through January 2025 for both dry van and reefer, the spread between spot and contract rates has continued to close.
"When the gap between spot and long-term contract rates is trending lower, it’s a signal that capacity is tightening and negotiating power is shifting toward truckload carriers," DAT Chief of Analytics Ken Adamo said in a statement.
