The Latest Freight Index Insights & Credit Concerns

U.S. Bank released their quarterly Freight Index Report this week. Aside from providing an overall summary of 2023, it also provides interesting insights on the state of the U.S. freight industry going forward. We like this index and will share it as we receive it.

Why do we like the U.S. Bank Freight Index?

We like it for multiple reasons. First, it breaks the country down into in four sections and compares year over year and month over month freight spend, offering the reader an easily consumable view and understanding of freight and spend activity by region. Second, we like how U.S. Bank analyzes freight volumes compared to spend, giving clear insight into macro-economic activities.

So, what about the Q4, 2023 report?

Here is our take reading the tea leaves from this report and the following is a summary:

  • Q4 2023 was not as bad as previous quarters.
  • Freight spend dropped at a lower rate than actual shipments quarter-over-quarter and year-over-year, with the exception of the Midwest region which lagged begind everywhere else.
  • This improvement in spend can be attributed to shippers paying more for freight suggesting the market is moving towards balance in supply and demand.
  • Volumes did not recover at the same rate because businesses worked to reduce inventory relying less on shipments. The outlook based on spend data is promising, as long as capacity continues to come out of the market. 

To view this report, click HERE.

Another article caught our eye this week and this comes from FreightWaves.

In this article, FreightWaves wrote about Bank of Montreal’s (BMO’s) gross impaired loans and acceptances and its impact on transportation.

Available credit is like the small, yet powerful engine that drives opportunities and wealth in the market. When banks begin scrutinizing loans that are not performing well, it could signal a warning of potential financial losses in the future.

When this occurs, banks often become more cautious and keep their funds closer, effectively cutting off the vital flow of money that keeps the economy running. We’re not suggesting it’s a repeat of 2008, but we do think this small news item signals a larger upcoming shake-up among carriers in the market over the next year.

To view this article, click HERE.