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The impressive third-quarter surge in freight activity paralleled a 4.9% increase in U.S. real gross domestic product (GDP) during the same quarter.
The portion of the economy linked to the freight industry grew 6.5% in the third quarter, breaking a streak of negative or nearly negative quarter-over-quarter growth that first began in the first half of 2022, according to data from the Transportation Intermediaries Association's most recent 3PL Market Report.
While the industry still faces headwinds in the form of sluggish freight volumes and trucking overcapacity, the unexpected robustness seen in the third quarter suggests that better times may be on the horizon, though not before the latter half of 2024.
"Our forward-looking data has had us bracing for continued weakness in the freight economy,” said TIA President and CEO Anne Reinke. “However, the surprising strength we saw during the third quarter goes to show that the market can still outperform forecasts.”
Reinke added that TIA’s members, which represent the full range of third-party logistics providers, continue to be “incredibly resilient” and “have made the most of less-than-stellar conditions in recent quarters."
The impressive third-quarter surge in freight activity paralleled a 4.9% increase in U.S. real gross domestic product (GDP) during the same quarter.
In spite of the overall positive performance, TIA members experienced quarter-over-quarter declines in total shipments (-2.2%) and total revenue (-0.2%). Invoice amounts per shipment were a bright spot, increasing by 2.1%. On a year-over-year basis, all three metrics registered double-digit percentage declines, underscoring the challenging environment.
Examining sector performance, the report highlighted that intermodal and less-than-truckload segments recorded quarter-over-quarter gains in total shipments, 0.9% and 3.3%, respectively. Truckload saw a -3.5% decline in total shipments. All three segments faced mid-single-digit to double-digit year-over-year percentage declines in total shipments.
A significant factor contributing to the freight economy's sluggishness is the growth in trucking capacity, which continued to expand from 2020 to year-end 2022 despite slowing demand post-pandemic. Although the past three years have seen the collapse of many small carriers, there’s still an issue of overcapacity that, until corrected, will keep challenging market conditions.
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