Trucking volumes dip in Q3

October 30, 2018 - A moderating economy, Hurricane Florence and the impact of tariffs all contributed to a 5.2% quarterly decline in freight shipments (1.1% decline, year-over-year), according to the U.S. Bank Freight Payment Index.

Freight spend, however, increased 13.5% year-over-year despite lower volumes caused by constrained trucking capacity. The increase can be attributed to higher average freight transaction prices.

While the exact impact of Hurricane Florence is difficult to measure, it had a negative impact on the Southeast region. In that area, the freight industry is expected to bounce back as a result of rebuilding efforts.

The changes in freight shipment, volume and spend were in line with the deceleration that was expected in the third-quarter gross domestic product growth, according to the press release.

"As trucking often leads the broader economy, the decreases seen in the U.S. Bank Freight Payment Index suggest economic growth may have peaked and may decelerate in the fourth quarter and beyond," Bob Costello, chief economist for American Trucking Associations (ATA), said in the press release. "Despite the sequential decreases in freight shipments and spending last quarter, the national truck market remains solid and capacity tight."

Meanwhile, the driver crunch goes on. According to the ATA, the annualized turnover rate at large truckload carriers — more than $30 million in annual revenue — jumped 4 percentage points in the second quarter, reaching 98%. Smaller truckload fleets, the ATA reported, were doing better, was the turnover rate dropped one point to 72%.

"There is something happening with turnover at these smaller fleets," Costello said in the ATA release. "The driver market remains tight across the truckload sector, but the turnover rate at these smaller carriers is down 14 points from the same time last year. Like large carriers, small truckload carriers have been aggressively raising pay this year, which has helped their turnover rate level off."

Less-than-truckload fleets—generally a more stable sector than truckload fleets—also saw a spike in their turnover, rising 4 percentage points to 14% — its highest level since the first quarter of 2013. To Costello, that indicates the LTLs are facing more problems hiring and retaining drivers than in the past, a troubling sign that "suggests the industry’s issues finding qualified drivers are continuing to deepen across the board."

Source: Supply Chain Dive