Executive Summary
As we enter the final quarter of 2024, economic indicators show improvement but the transportation industry remains mixed, with strength in the intermodal and maritime sectors contrasting with continued challenges in the truckload market.
September brought several positive developments for the broader economy, with the labor market leading the way. Job gains far exceeded expectations, with upward revisions to July and August estimates adding a net 72,000 jobs to the 254,000 increase in payroll employment for the month. Other notable developments included the Federal Reserve's first interest rate cut at the September meeting, signaling the possibility of further cuts this year. Additionally, the third release of second-quarter GDP data showed only minor revisions, maintaining a growth estimate of 3.0%. However, the economic effects of Hurricane Helene remain uncertain, with damage estimated between $145 billion and $160 billion, alongside expected declines in consumer spending, job losses and furloughs in key sectors such as retail and agriculture.
Truckload conditions remained challenging in September, with excess capacity continuing to suppress growth. Despite stable freight volumes, further contraction in domestic manufacturing has dampened potential growth in truckload activity. As the peak shipping season approaches, demand is expected to remain subdued, similar to the past two years, as the oversupply of capacity easily absorbs any increases in volume. In contrast, rail carriers continue to benefit from gains in market share, with intermodal volumes growing in September. U.S. container imports also saw growth, totaling over 2.5 million twenty-foot equivalent units (TEUs), up 1.7% MoM and 14.4% YoY.
The port strikes by the International Longshoremen's Association (ILA) along the East and Gulf Coasts, which began on October 1, lasted only three days before a tentative agreement was reached with the U.S. Maritime Alliance (USMX). The agreement, which extends the current master contract through January 15 of next year, includes a 62% increase in top wages for longshore workers and allows ports to reopen while negotiations continue. Although these ports handle approximately 25% of U.S. imports annually, the early announcement of the strike led to reduced volumes through frontloading and diversions. The short duration of the stoppage is expected to enable a quick return to normal operations within days rather than weeks.
Industry Overview: September Key Figures (YoY)
| Truck Data Points | YoY% Change |
| DAT Spot Rates (incl. FSC) | -8.0 q |
| Fuel Prices | -22.0 q |
| ACT Class 8 Preliminary Orders | 16.0 p |
| ATA NSA Truck Tonnage* | -1.1 q |
| Cass Freight Index** | -3.3 q |
| Cass Freight Shipments | -1.9 q |
| Cass Freight Expenditures | -9.9 q |
*Report released on 9/24/2024
**Report released on 9/14/2024
Main Takeaways
Economy
Domestic manufacturing remained in contraction in September as ongoing uncertainty surrounding the elections and federal monetary policy continues to deter further investments in capital and inventories. Continue reading...
Truckload Rates
Average truckload spot rates declined further in September while contract rates registered a slight increase, further widening the contract-to-spot spread. Continue reading...
Truckload Demand
Demand levels were stable in September following the Labor Day holiday but provided little insight into when traditional pre-holiday peak shipping season would begin ramping up. Continue reading...
Truckload Supply
Excess truckload supply continues to put negative pressure on market conditions, as tender rejections remained below the 5% threshold. Continue reading...
Truckload Capacity Outlook
Declines in the carrier population slowed in Q3, suggesting for-hire capacity levels may be stabilizing. Continue reading...
Fuel
Weak global demand and limited impact from macroeconomic events dropped average diesel prices to their lowest level in two years. Continue reading...
Dry Van
Dry van volumes remained weak in September, pushing average spot rates down further for a third consecutive month. Continue reading...
Reefer
Reefer activity declined considerably in September while average spot rates registered only minor declines. Continue reading...
Flatbed
The flatbed sector performed the best of the three major mode types, as volumes surged and average spot rates increased slightly in September. Continue reading...
Intermodal
Intermodal rates have started trending higher as overall volumes remained resilient in September. Continue reading...