The days of long wait times caused by shipping bottlenecks and driver shortages are quickly fading in the rearview mirror.
But freight volumes should pick up again this fall
By Andy Kriege, YSN
Freight shipments across all transportation platforms have slowed down considerably since mid-2022.
The reduction is due in part to bulging inventories that have yet to be depleted following volatile retail spending and distribution issues, which left many retailers overstocked for the past 12 months.
As a result, freight movement on U.S. roads, rails and through ports has slowed, signaling an end to the boom in shipping that was on steroids during the pandemic. Fueled by skyrocketing orders for goods, the logistics networks were strained nearly to the breaking point to try to keep pace with unprecedented consumer demand.
Keep on Truckin’ – Not So Much
The volume of freight moved by truck in the peak shipping season of 2022 dropped by the largest year-over-year level since the heart of the pandemic, according to the latest U.S. Bank Freight Payment Index.
Bob Costello, senior VP and chief economist for the American Trucking Associations (ATA), attributes the slowdown to a shift in consumer spending. “A pullback in consumer spending on goods is causing the truck freight market to soften,” he told The Trucker.com. “Higher prices for goods are leading to less consumption of items moved via truck.”
However, most freight carriers are expecting a rebound and a return to more normal shipping patterns later this year, according to a report in The Wall Street Journal, which cited several retail customers who expect to resume restocking after winding down inventories in recent months.
“The general consensus, almost unanimous, from customers that have given us feedback about their inventories, has been that by the time they get through the spring they will get caught up,” said David Jackson, president/CEO of trucking giant Knight-Swift Transportation Holdings. “What we expect is that through the first two quarters of this year, we’ll see this softness as a result of freight that’s already moved, and then we start to move back into a more normal cycle,” he told the Journal.
Related: Inflation Catching up to Consumers
The Coast is Clear
Not only are trucking shipments down, but inbound volumes at U.S. ports are trending lower as well. There are virtually no freighters waiting to enter port off Pacific waters and increasingly few on the East and Gulf Coasts.
A separate Wall Street Journal article from January showed that fewer offshore goods are flowing into the domestic freight networks. Imports into the West Coast ports of Los Angeles and Long Beach in December reached their lowest point since June 2020 and shipments have been below 2019 levels since September, the publication reported.