🎣 Freight Payment Index

Good morning. In today’s feature story, we are exploring the current state of the U.S. freight market as reported in the U.S. Bank Freight Payment Index.

Plus: J. Bauer Trucking closes, ArcBest sees challenges & growth, FMCSA delays broker financial compliance provisions, and more.

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🐔 WHAT’S COOKIN’ IN FREIGHT

📉 ArcBest Sees Challenges & Growth. ArcBest’s asset-light segment, including truck brokerage & MoLo Solutions, reported a $3.9 million operating loss in Q3, its fifth consecutive quarterly loss, as revenue declined 8.1% year-over-year to $385.3 million due to weak demand and lower shipment sizes. Despite this, the company achieved a 187% rise in net income to $100.3 million ($4.23 per share), driven by rigorous cost controls, productivity improvements, and a $69.1 million adjustment from a previous acquisition’s earnout provision. While both the asset-based and asset-light segments faced headwinds, ArcBest remains focused on managed transportation growth and strong customer retention to support long-term strategic goals, according to CEO Judy McReynolds.

🚛 Wisconsin's J. Bauer Trucking to Close, 64 Workers Affected. Medford-based J. Bauer Trucking Inc. will permanently close by December 31, 2024, resulting in 64 layoffs, including 41 truck drivers. Founded in 1973, J. Bauer has served regional and nationwide clients with routes spanning 47 states. The closure announcement, made to Wisconsin’s Department of Workforce Development on October 30, confirmed that employees lack options for transfers or bumping rights. None of the affected employees are part of a union. This decision marks the end of over five decades of J. Bauer's contributions to the Midwest’s trucking industry.

⏰ FMCSA Delays Key Broker Financial Compliance Provisions. FMCSA is extending the compliance deadlines for three major provisions in the "Broker and Freight Forwarder Financial Responsibility" rule until January 16, 2026. The delay stems from a pending new online registration system essential for managing filings and tracking notifications. Originally, these provisions were due by January 16, 2025, and include suspending brokers’ authority if financial security drops below $75,000, requiring prompt surety notification of financial failures, and penalizing non-compliant financial providers. Public comments on the extension are open for 15 days. This regulation aims to protect trucking and brokerage companies from fraud.

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Freight Market Decline Eases – Could This Be a Turning Point?

U.S. Bank recently released its Freight Payment Index for Q3 2024, which measures the pace of shipments and spending across the freight market. Though these index numbers are in decline, they hint that we might be nearing a turning point. Here’s a look at what the latest index tells us about where the market stands—and what might lie ahead.

Market Overview: Softness Continues

The Q3 2024 U.S. freight payment index shows a slowdown across the freight market, with both the shipment and spending index values dipping. But there’s a silver lining: the rate of decline is slowing, hinting at the possibility of hitting the bottom.

• Shipments: The index rating for shipments dropped 1.9% compared to Q2, marking the ninth straight quarter of declines.
• Spending: The spending index rating fell by 1.4% from Q2, reflecting companies' cautious spending behavior.
• Bright Spot: The slowing pace of decline in these index values hints that the freight market might be stabilizing.

Regional Recap: Mixed Results Across the U.S.

Q3 wasn’t a one-size-fits-all for regional freight activity. While some areas showed slight improvements in their index ratings, others took a hit.

• West Coast: Modest shipment growth thanks to a bump in imports at coastal ports.
• Midwest: Housing starts boosted shipments—one of the few bright spots.
• Southwest: It’s rough—shipments are down 28.6% year-over-year due to flat cross-border trade and manufacturing hurdles.

Manufacturing & Housing Woes

Two pillars of the freight market—manufacturing and housing—were dragging in Q3, impacting overall freight demand.

• Manufacturing Output: Down, particularly in durable goods, which fell by 2%–2.5% compared to Q2.
• Housing Starts: Declined nationwide, with single-family starts especially low. Less construction means less freight demand, so this sector’s slump hit hard.

Retail & Fuel Prices: A Mixed Bag

Q3 wasn’t all bad news. Retail sales saw a slight lift, and diesel prices eased up, but their impact on the freight market was modest.

• Retail Sales: Inched up by nearly 2.5% from Q2—helpful but not a game-changer.
• Fuel Prices: Diesel prices dropped by 4.5% during the quarter, lowering shipping costs and squeezing freight spending.

Looking Ahead: Signs of a Bottom?

Are we near the end of this slide? Maybe. The slowed pace of decline in the index offers a sliver of optimism, though the path forward still looks rocky.

• Optimism: With the rate of decline easing up, a bottoming out could be on the horizon.
• Reality Check: Weak manufacturing and housing mean any recovery will be gradual and bumpy.
• Opportunities: Regional disparities could present opportunities for growth—especially in markets like the Midwest and West that are seeing some stability.

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🌎 AROUND THE FREIGHT WEB

🧑‍🌾 The Amish Way. While everyone is talking AI and robotics in supply chain, Amish suppliers keep it old-school, proving that some things run just fine without tech.

💪 Market Gains. XPO and other LTL carriers report strong pricing, which expert Benjamin Gordon says often signals upcoming improvements in contract and spot rates. Craig Fuller of FreightWaves adds that the pace is gradual, but it's happening.

🕵️‍♂️ Bookkeeper Sentenced. Leann Marie Rouse was sentenced for embezzling $453K from an Iowa trucking company. She was also ordered to pay back the $453K to the company.

🇲🇽 Mexico’s Security Challenge. With Mexico’s new president, Claudia Sheinbaum, in office, Mark Vickers (founder of Bordless Coverage) is emphasizing the need to address transportation security to boost the nation’s supply chain stability.

📉 PMI Down. The Institute for Supply Management's PMI dropped to 47.2% in October, driven primarily by declining production but also including layoffs and uncertainties related to the upcoming election.

🎣 THE FREIGHT CAVIAR CORNER

• Conferences: F3 Future of Freight Festival, November 19-21 in Chattanooga. Get $1395 off with our special link. In February, join us at Manifest Vegas 2025. Register with our link and save $200.
• Freight Jobs: Find the latest freight job listings here.
• Find Shippers Fast: Looking for customers? Check out ShipperCRM, the world's largest shipper database, and create an account.
• Podcast: Check out our interview with Thilo Huellmann, Co-Founder at Levity.ai, which provides AI-driven email automation solutions for freight. Watch here.

FREIGHT MEME OF THE DAY