Shippers paid 32.1% more to move freight in Q3 on just 0.5% more volume, U.S. Bank index shows
The U.S. Bank Freight Payment Index recorded the largest annual jump in shipper spending since 2021, with the Southwest up 51.6% as tighter capacity and diesel above $6.50 a gallon pushed costs higher.
U.S. shippers kept paying more to move essentially the same amount of freight in the third quarter, according to the latest U.S. Bank Freight Payment Index, published Oct. 29.
Spending rose 5.2% from the second quarter and 32.1% from a year earlier, the largest annual increase since 2021. National shipment volumes rose 0.4% quarter over quarter and 0.5% year over year. U.S. Bank says that is the first time volumes have risen on both measures since 2021, but the gains were modest.
The bank attributes the gap to tighter carrier capacity and diesel prices that climbed over $6.50 a gallon nationally.
"What makes this quarter notable is that outlays are rising much faster than freight volumes," said Bob Costello, senior vice president and chief economist at the American Trucking Associations. "Freight demand remains uneven, but companies are encountering tighter truck capacity, higher fuel costs and stronger carrier pricing power. As a result, shippers are spending substantially more to move essentially the same amount of freight."
Regional results
| Region | Shipments vs Q2 | Shipments vs year ago | Spending vs Q2 | Spending vs year ago | |---|---|---|---|---| | National | +0.4% | +0.5% | +5.2% | +32.1% | | West | -3.1% | -2.1% | +5.2% | +31.1% | | Southwest | +2.9% | -2.6% | +8.6% | +51.6% | | Midwest | -2.5% | +2.4% | +0.6% | +25.3% | | Northeast | +1.4% | +2.8% | +4.1% | +25.4% | | Southeast | +4.7% | 0.0% | +9.0% | +32.7% |
Shipments rose in the Southeast, Southwest and Northeast from the second quarter and fell in the West and Midwest. The Southeast had the strongest quarterly shipment gain at 4.7%, the West the largest decline at 3.1%. Compared with a year earlier, the Northeast led shipment growth at 2.8%.
Spending rose in every region, both from the prior quarter and from a year earlier. Quarterly gains ranged from 0.6% in the Midwest to 9% in the Southeast.
Southwest and West
The Southwest posted the largest annual spending increase, 51.6%. U.S. Bank links that to especially tight capacity as enforcement actions reduced the availability of drivers hauling domestic loads. The West faced outsized fuel pressure, with California diesel reaching $8.25 a gallon in late September.
"Freight conditions vary by region, but cost pressure is widespread," said Bobby Holland, director of freight business analytics at U.S. Bank. "Even where volumes are flat or declining, tighter capacity and higher operating costs are driving spending higher."
How the index is built
U.S. Bank Freight Payment processes about $46 billion in freight payments a year. The index uses actual transaction payment dates and covers domestic truckload and less-than-truckload volume. It is seasonally and calendar adjusted.