The truck freight market continued its downward trend in the final quarter of 2024 as both truck freight volumes and spending experienced further declines, according to a U.S. Bank Freight Payment Index report.
“It’s clear there are both cyclical and structural challenges remaining as we look for a truck freight market reboot,” said Bob Costello, senior vice president and chief economist at the American Trucking Associations.
“For instance, factory output softness – which has a disproportionate impact on truck freight volumes – is currently weighing heavily on our industry," Costello said.
The report also noted the impact of the growth of private fleets since the pandemic. During the freight boom of that period, some private fleets expanded as shippers paid higher rates for truck transportation or struggled to secure capacity at those elevated rates.
"As a result, the carriers operating these private fleets ended up shipping less with for-hire less in an effort to keep their drivers and trucks busy during this period," the report said.
The fourth quarter saw continued weakness in the factory sector, significantly affecting truck freight volumes. Shipment volume dropped 4.7% compared to the previous quarter, while spending fell 2.2%.
Regionally, all areas saw declines in shipment volume. The Northeast had the smallest decrease at 1.2%, followed by the West at 2.1%. The Southeast recorded the steepest drop, down 6.7%, as hurricanes disrupted freight movement.
Market volatility, marked by the potential impact of the Trump administration’s tariff plans, continues to persist in the industry.
Uber Freight’s Q1 market update and outlook reported that in the U.S. full truckload sector, the cost per loaded mile remains significantly higher than spot rates, likely leading to gradual rate increases.
However, the report pointed out that spot rates have begun to decline in early 2025, following the usual seasonal drop after the winter peak. This comes after truck operating costs rose by 2 cents per mile in 2023 despite a 9-cent decline in diesel prices, driven by year-over-year increases in insurance (+13%), truck and trailer costs (+9%), and driver wages (+8%). Costs then fell by 2 cents per mile in 2024, resulting in overall stability over the past two years.
Despite current demand, the report suggested that the freight market may soon rebound as early signs of recovery emerge. The ISM Purchasing Managers’ Index, an economic indicator derived from monthly surveys in the manufacturing sector, rose to 50.9 in December, surpassing the expansion threshold for the first time in over two years.
In January, Old Dominion Freight Line CEO Marty Freeman also referenced the manufacturing sector’s improvement as a positive sign for the trucking industry, calling it a “shift in momentum.” He wrote, “We believe 2025 will be defined not just by growth but by prosperity.”
“New orders and production increased while employment stabilized,” Mazen Danaf, senior economist and applied scientist at Uber Freight, wrote in the report. “The manufacturing economy appears to be expanding after a prolonged period of contraction, signaling a positive outlook for freight demand.”
The report also pointed out that tractor and trailer orders surged in November. Sleeper tractor orders soared 57% and were 11% higher year over year, while dry van trailer orders climbed 58% and were 15% higher year over year.
“This signals a rise in confidence among carriers," Danaf said. "Weak production and sales, reflecting subdued demand in 2024, suggest that capacity will continue to contract in the coming months.”
