The latest first-quarter data released by Bank of America as part of its Freight Payment Index paints a mixed picture of the national truck freight market characterized by a sustained decline while at the same time showing emerging signs of recovery.
The goods index fell 5.8% from the second quarter to 75.4 points, while the expenditure index fell 2.5% to 177.8 points. Despite these quarterly declines, potentially stable signals after a potential decline of 8.6% year-on-year spending since the first quarter of 2023, with three-quarters down more than 20%. Bob Costello, chief economist at the American Truck Transport Association, has been attributed to severe winter storms, wildfires, tariff uncertainty and retail retail. Extreme weather events, including heavy snow in the south and southeast, and devastating wildfires in Southern California, destroyed weeks of freight volume, although Western cargo reported higher cargo in the quarter.
Economic factors lead to mixed signals. Shippers and manufacturers have increased imports and production to seize potential tariffs, temporarily increasing freight demand in certain sectors. But soft retail and cautious consumer spending have created a headwind on large commodities. The difference between shipments (-5.8% per quarter, -13.8% per year) and expenditure (-2.5% per quarter, -8.6% per year) declines indicate that as diesel prices rise and fleets rise, the industry's capacity increases due to certain operators withdrawing or reducing ships. Freight rates showed moderate recovery rates, with spot rates rising 0.9% and contract rates rising 0.8% from the fourth quarter, although both were lower than Q1 2024. Fuel prices rose 2.3% quarterly, but fell 14% yearly, further affecting the spending trend.
Regionally, the results vary widely. The Northeast region increased freight growth by 3.6% and spending growth by 4.1% with retail and imports, the strongest results since the second quarter of 2022. By contrast, the Midwest and Southeast face challenges. The Midwest fell due to weak manufacturing, with housing beginning and winter weather down 30%, while the southeastern snow and flat retail growth struggled. Going forward, the freight market faces uncertainty in the housing sector, although improvements in factory output and potential shifts toward commodity purchases bring hope.
Data released on April 8, ACT Research and FTR Transport Intelligence, showed that the total total orders have had the lowest since May 2020 during the COVID-19 shutdown period. The ACT study reported 7,600 units, a year-on-year decrease of 52%.
"Between the end of the industry's annual "order season" and the uncertainty surrounding the impact of U.S. economic policy, the cumulative cumulative MD and HD orders are the weakest since the beginning of the "Erection Day" month, starting in April, and the beginning of the Markets Markets since the beginning of the market," Ken Vieth, president and senior analyst at ACT Research, wrote in a press release.
Competitor FTR Transport Intelligence Report reported 7,400 units in April, with monthly and y/y stakes down 54%. For reference, the average of the orders on April 8 was 18,963. FTR pointed out that the U.S. mutual tariffs announced in early April have brought further challenges to the fleet and overall freight market. Additionally, according to the press release, some fleets are pushing for truck and tractor purchases until market conditions improve or stabilize.
From September 2024 to April 2025, checking cumulative orders for the 2025 Level 8 order season, orders fell 11% compared to the 2024 order season. "The increase in uncertainty could lead to an unusually low order level this month," FTR added. "The response level of response to uncertainty. The order level in both the highway and career markets has dropped significantly as demand fundamentals weakened."
(Figure: Logistics Manager Index)
The latest data from the Logistics Managers Index (LMI) in April shows that shippers are more stringent as shipping prices soared before capacity growth. LMI is a diffusion index where readings exceed 50 signals and the following readings, i.e. shrinkage. The overall LMI index rose from 57.1 to 58.8 points, partly due to rising inventory levels and rising warehousing and transportation prices.
Transportation prices rose 5.8 points to 62.3 points from March, while lower rates of transport capacity rose from 53.6 points to 1.6 points to 55.2 points. Todd Maiden of Freightwaves wrote: "The report on Tuesday said that the 'negative freight inversion' in late March, when capacity growth was faster than pricing and did not last until April, meaning the transportation market is still officially expanding.''''
One ongoing theme pointed out by the author is original inventory cost and storage prices, "This shows that most of the inventory that has been rushing during the first quarter is still stagnant in the storage facilities rather than being sold to consumers. The inventory movement we observed from January to mid-term is very similar, and we usually see it from mid-August." The main difference between Q1 and Q3 is that the inventory inventory in Q3 comes from items to be sold on holidays; current inventory accumulation will take more time to sell, which indicates higher overall storage costs.
More inventory accumulation due to tariff uncertainty, as the transport capacity is poor. The LMI authors added: “Generally, our future numbers suggest that we may see dynamics similar to the freight recession in 2019 and 2022. Both of these downturns depend on a decrease in B2B activity, which is warm or expanding in upstream activities, during which periods of these freight, during which periods of these freight, during which periods of our downstream activities, in our downstream activities, are consistent phases of consistent phases and continue the consistent phases.
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Summary: The first week of May dropped outbound bids, while the rallies with small rates of outbound bid rejection. Outbound tenders fell to 375.14 points or 3.57% in the past week from 10,499.85 on April 28. The outbound bid rejection rate was the opposite, increasing 49 basis points (49 basis points of W/W from 4.9% to 5.39%).
A recurring theme compared to the year-on-year supplement is that, despite the low export bidding volume, the availability of transport capacity is still more favorable when viewing outbound bidding rejection rates. Last year's OTVI was 11,043.42 points, 918.71 points higher than the current level and 8.32%, while OTRI was 216 basis points higher than 3.23% on May 6, 2024.
By comparing segments, dry trucks continue to underperform, smaller and more volatile sandal segments. The denial rate of dry truck outbound bidding increased from 4.47% to 17 barrels, while the gazebo rejection rate remained higher, from 8.65% to 15 bps w/w, reaching 8.8%. Reefer's more favorable pricing power is also reflected in the growth of the overall spot market speed, while dry truck prices seem to have bottomed out for the time being. RTI (RTI rose 3 cents per mile, from $2.44 $2.47, while NTI dry van spot rate fell 1% per mile (per mile), from $2.21 to $2.20.
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