September 2024 Industry Update

Executive Summary

Like the broader economic landscape, the transportation industry remains dynamic, with a mix of both positive and negative indicators, suggesting that a return to “normalcy” may be on the horizon.

On the economic side, there were signs of a cooling labor market in August, as job gains remained modest following downward revisions to June and July figures. These revisions were prompted by the Labor Department's report that job gains for the year ending in March 2024 were overstated by 818,000, or 28%. This reduced the average monthly job gains during that period to 174,000, down from the previously reported number of 242,000. Unemployment decreased slightly while the Federal Reserve’s preferred inflation gauge approached its 2% target, raising expectations of a potential interest rate cut of at least 0.25%, and possibly 0.50%, at its next meeting in September. Meanwhile, second-quarter GDP growth was revised upward by 0.2% to 3.0%, primarily because of stronger consumer spending. However, manufacturing activity continued to contract, hindered by weak demand, rising inventories and uncertainty surrounding the upcoming election.

In the transportation sector, the truckload market continues to face challenging rate conditions despite stable freight volumes. Although reductions in supply have reintroduced some seasonality, the lack of significant changes in rates or tender rejections leading up to the Labor Day holiday indicates that further capacity reductions are necessary. The intermodal sector is gaining momentum as volumes approach 2021 peak season levels, driven by strong import activity and resilient consumer spending. Despite this improvement, weak truckload conditions have kept rate growth subdued.

As the industry moves into Q4 and the pre-holiday peak shipping season, the outlook for transportation conditions remains uncertain. Weak domestic manufacturing continues to be the primary headwind for truckload demand, while the growing number of carriers, in anticipation of higher freight volumes, delays any rate recovery. Amid rising imports, the potential strike by the International Longshoremen’s Association (ILA) at East and Gulf Coast ports is likely to create capacity shortages and trigger rate spikes in the West.

Industry Overview: August Key Figures (YoY)

Truck Data Points	YoY% Change
DAT Spot Rates (incl. FSC)	-3.9 q
Fuel Prices	-15.3 q
ACT Class 8 Preliminary Orders	16.0 p
ATA NSA Truck Tonnage*	2.7 p
Cass Freight Index**	-3.2 q
Cass Freight Shipments	-1.1 q
Cass Freight Expenditures	-6.2 q

September 2024 Industry Update

Executive Summary

Industry Overview: August Key Figures (YoY)

Main Takeaways

Economy

Truckload Rates

Truckload Demand

Truckload Supply

Truckload Capacity Outlook

Fuel

Dry Van

Reefer

Flatbed

Intermodal

Further Reading