A measure of the nation’s freight market showed gains in both spending and shipments during the fourth quarter of 2017, but the strength of the advances differed widely.
Spending for trucking services advanced by the highest rates so far this decade, reflecting solid demand coupled with tighter capacity due to driver shortages and new regulations, according to U.S. Bank Freight Payment Index.
Shipments, on the other hand, increased by the smallest amount of any quarter in 2017, fitting with the slightly lower overall economic output during the final quarter of the year.
“The growth in shipments for the fourth quarter was solid, just not quite the torrid pace of the previous two quarters,” said American Trucking Associations Chief Economist Bob Costello, who provides analysis on the index results. “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 to track driver hours-of-service, which took effect in December.”
The results mirror the broader economic picture during the period, as figures released Friday by the Commerce Department showed the U.S. gross domestic product (GDP) in the final three months of 2017 expanded at a 2.6% annual rate, down from a slightly better 3% rate in the second and third quarters of the year.
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 the 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, at just under 11%.
The quarterly U.S. Bank Freight Payment Index measures changes in shipment and spending activity based on data from transactions processed through U.S. Bank Freight Payment, totaling $23 billion annually. These transactions are across a range of industries, including automotive, manufacturing, food and retail.
The full report can be downloaded from U.S. Bank.