U.S. Bank Freight Payment Index: Number of shipments drop, cost to ship climbs

The U.S. Bank Freight Payment Index released today revealed that the cost to ship goods via freight truck continued to grow strongly in the fourth quarter of 2021, jumping 20.2% compared to the last three months of 2020. Meanwhile, a lack of available trucks and drivers, as well as a decision by many retailers to acquire more holiday inventory earlier than usual, led to a 5.1% contraction in the number of shipments in the fourth quarter compared to the same quarter of 2020.

“The freight trucking industry faced familiar challenges as we closed out 2021: a lack of available drivers, trucks, and trailers. This is increasing costs for shippers and making it more difficult for carriers to haul more freight,” said Bobby Holland, U.S. Bank vice president and director of Freight Data Solutions. “The rising cost of diesel fuel in the fourth quarter – up nearly 10 percent compared to the previous quarter – also drove up costs for those shipping goods by truck.”

Shipment Index

In addition to the 5.1% decrease in shipments over the fourth quarter of 2020, the latest U.S. Bank National Shipments Index dropped 2.4% compared to Q32021. For full year 2021, shipments were down 0.5% compared to all of 2020 and 4.5% compared to all of 2019.

American Trucking Associations (ATA) Senior Vice President and Chief Economist Bob Costello said that the lower shipment volume in the fourth quarter was partly due to anxious retailers acquiring more of their holiday products in the third quarter. The larger issue, though, is capacity. Costello noted that ATA data shows that carriers who primarily haul contract freight operated roughly 5% fewer trucks in 2021 compared with 2020.

Spend Index

In addition to the 20.2% year-over-year increase in spending over the fourth quarter of 2020, the U.S. Bank National Spend Index rose 8.4% compared to Q32021. For full year 2021, spending by shippers was up 26.5% compared to all of 2020 and 21.5% compared to 2019.

“In 2021, we moved about the same amount of goods via truck freight in the U.S. as we did in 2020, but it cost more than 25 percent more to do so,” said Costello. “The demand for trucking services continues to be high, but until driver shortages, as well as various supply chain challenges – such as those that are causing new truck and equipment shortages – are improved, capacity will be constrained.”

Regional Data

West
Shipments
Fourth quarter: -6.4%
Year over year: 2.5%

Spending
Fourth quarter: 12.0%
Year over year: 29.0%

The West, which has been the strongest region for freight truck shipping in 2021, experienced a 6.4% decrease in shipment volume in the fourth quarter. Shipments were influenced by a drop in West Coast port volumes as Southern California ports remained congested. This has caused some shippers to switch to East Coast ports. Strong housing construction numbers in the West helped limit the decline in shipping volume.

Midwest
Shipments
Fourth quarter: -2.9%
Year over year: -12.0%

Spending
Fourth quarter: 6.7%
Year over year: 15.8%

This quarter marked the second straight quarter-over-quarter decrease in shipments for the Midwest. A significant drop in auto production – caused by supply chain challenges – is causing reduced freight levels in the region.

Northeast
Shipments
Fourth quarter: -1.6%
Year over year: -1.2%

Spending
Fourth quarter: 8.0%
Year over year: 23.8%

Shipments in the Northeast fell, but were helped by solid household consumption of goods in the region. Spending in the region hit a record high as a result of tight capacity.

Southeast
Shipments
Fourth quarter: -1.5%
Year over year: -4.7%

Spending
Fourth quarter: 8.4%
Year over year: 18.7%

The region experienced its worst year-over-year drop in shipment volume since Q2 2020. Like the Midwest, Southeast truck freight volumes are being impacted by auto manufacturing challenges.

Southwest
Shipments
Fourth quarter: 0.7%
Year over year: 2.2%

Spending
Third quarter: 7.9%
Year over year: 20.4%

The Southwest was the only region to record an increase in shipment volume in the fourth quarter. Strong crude oil production, as well as solid truck freight volumes between the U.S. and Mexico, is helping freight truck volumes in the region.
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To see the full report including in-depth regional data, visit the U.S. Bank Freight Payment Index website (https://freight.usbank.com). For more than 22 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 (https://www.usbank.com/transportation-solutions/freight).

The business processed $37 billion in 2021 for some of the world’s largest corporations and government agencies.