Bobby Holland, vice president and director of freight data solutions with U.S. Bank, discusses the results of the firm's latest quarterly Freight Payment Index, what it means for truckers, and how it mirrors trends in the economy as a whole.
Conditions revealed by U.S. Bank’s Freight Payment Index for the second quarter of this year were “as bad as most people expected them to be,” says Holland. Nationally, shipments were down by about 7.6%, while the spend index fell 13.7%. “It wasn’t catastrophic,” he adds, “but it was definitely a big hit.”
Regionally, the Southwest showed best results, with a 1.3% increase in shipments and 21.4% decline in spend. The West saw reductions of 1.8% and 7.5%, respectively, in part because sluggish volumes at West Coast ports dragged down results. Steeper declines occurred in the Midwest (5.5% and 11%, even though it was somewhat bolstered by renewed manufacturing activity in Mexico), the Northeast (12.6% and 12.7%), and the Southeast (down 14.1% and 21.1%).
How each region reacts to the continuing pandemic in the coming months will affect future results. Policies differ sharply with regard to social distancing and the shutting down of businesses.
Holland views the bank’s Freight Payment Index as “a good way to take the temperature of the economy.” Customers combine that data with other indices to make key decisions about future activity. As for the third quarter of this year, Holland says it’s impossible to forecast with any accuracy, although the possibility exists for some improvement in the numbers. “As confidence continues to build, and more areas open up,” he says, “we can expect things to get better and better.” But in the freight sector, questions remain about which carriers will end up surviving the current recession.
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