The nation’s trucking woes are as challenging as ever. As companies work tirelessly to ship critical goods, they’re wrestling to secure capacity, control costs, and get their products to their destination on time.
Since 2017, we’ve published the quarterly U.S. Bank Freight Payment Index, which is based on data from tens of thousands of paid truck freight invoice transactions between shippers and carriers. For context, in 2021 we processed more than $37 billion in shipper and carrier payments. The Index provides a window into changes in shipping cost and volume on a quarterly basis. Importantly, we break the data down by region, as each region has unique challenges. What follows are key points from our most recent Index and other sources along with ideas for enhanced support to help navigate the industry’s ongoing volatility.
Spending growth
One trend to watch is that the Index shows continued growth in spend by shippers. Spending on truck freight in Q2 increased 3.3% from Q1 2022 and was up 19.7% year-over-year. This increase is due not only to record diesel prices but also to a movement of shipments from the spot market back to the contract market.
Most of the transaction volume that we track is from the contract market, therefore the U.S. Bank indexes are more reflective of contract freight as opposed to the more expensive spot market. Our data indicates that even though contract carriers seemed to have held their prices relatively steady, there’s increased utilization of the contract market.
In the second half of 2020 and through most of 2021, shippers relied heavily on the spot market to manage capacity challenges stemming from driver and equipment shortages. The spot market also helped address the tremendous spike in household goods spending as consumers stayed home and stocked up.
But as spending on travel and services began to increase in 2022 and the economy contracted in Q1, trucking capacity opened up and the freight market shifted back to contract carriers. The slight decrease in demand was offset, however, by the dramatic rise in fuel prices, as well as some strength in manufacturing and housing in various parts of the country. These factors helped push the spend index higher in Q2, in spite of the modest slowdown in the economy during the quarter. From a volume standpoint, the U.S. Bank National Shipments Index increased 2.3% in Q2.
Regional trends and revelations
Interestingly, changes in shipment volumes varied by region. Shipment volumes decreased for two regions—the Southeast and West—in Q2, by 4.3% and 0.7% respectively. Contrast that with the volume gains in the Northeast (7.3%) and the Midwest (6.8%). Compared to the same quarter in 2021, the Southwest recorded a 2.8% volume gain—the fifth straight quarter with a year-over-year increase. (See Figure 1.)
Looking more closely at the Southeast’s considerable decline, this region’s shipments index contracted a little over 12% year-over-year—far outpacing the other five. Reasons leading to this drop could include softer housing starts (a big factor for this region) and slower retail sales in the region. Although tourism-related services may be strong in the Southeast, trucking to support these services generates less volume than the transportation of goods.
Alternatively, the Midwest demonstrated the power of strong manufacturing output, which fueled higher Q2 truck freight levels in this region. Even more pronounced, the Northeast region posted its largest quarterly gain in three years. Housing starts in the region were stronger than the others, and a higher factory output helped boost freight volumes to the nation’s highest level.
Driver and equipment shortages
As noted earlier, over the past two years, the spot market surged as shippers’ contract carriers couldn’t haul the added freight during the pandemic because of capacity and driver constraints. Now, contract freight is outperforming the spot market. However, driver and equipment shortages continue to cause problems.
According to American Trucking Associations (ATA), the driver shortage is at a historic high with no end in sight.1 Over the next decade, more than one million new drivers will be needed to replace those leaving the market and enable growth, the ATA reports.
A range of incentives are being offered to recruit new drivers and retain current ones. In fact, the ATA notes that average annual earnings have increased by five times the previous standard. But some drivers are choosing to work less. Others are reluctant to make trucking their career due to lifestyle challenges—including time away from home—and other barriers to entry, such as failed drug tests, driving record infractions, and criminal histories.
Adding to the turmoil, truck parts (for new and used trucks) are in very short supply due in part to pandemic-forced factory shutdowns and other supply chain issues, such as port congestion, the Ever Given Suez Canal blockage, and weather events. To compensate, fleets are being even more vigilant about maintenance schedules, recognizing that their equipment must do more than ever before, all while maintaining excellent safety standards.
Smart support for tough times
Diesel prices, labor costs and availability, equipment costs and availability, and economic uncertainty—these are tough times for the industry. Smart use of shipping data, analytics, and industry benchmarking, however, can help companies better navigate these volatile times. Insights regarding trends affecting the entire industry—particularly spending and volume levels—can be very useful for logistics planning.
Tools such as our Freight Payment Index can help shippers analyze current freight shipping data at both national and regional levels to make informed decisions based on factors most relevant to their organization. Robust analytics can help supply chain and logistics professionals gain a further edge over their competition by providing reporting and data analysis capabilities that dive deeper into causes and effects and model options to further improve their supply chains.
Finally, benchmarking can help companies analyze utilization and spend to see where they stand compared to their peers. This analysis further enables them to gauge their performance and determine opportunities to adjust and achieve improvements.
Nationwide capacity and supply data are very dynamic. But the more an organization can anticipate issues and discuss them with its stakeholders, the more it can maintain an effective, responsive supply chain—even in the most challenging times.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”
It’s getting a little easier to find warehouse space in the U.S., as the frantic construction pace of recent years declined to pre-pandemic levels in the fourth quarter of 2024, in line with rising vacancies, according to a report from real estate firm Colliers.
Those trends played out as the gap between new building supply and tenants’ demand narrowed during 2024, the firm said in its “U.S. Industrial Market Outlook Report / Q4 2024.” By the numbers, developers delivered 400 million square feet for the year, 34% below the record 607 million square feet completed in 2023. And net absorption, a key measure of demand, declined by 27%, to 168 million square feet.
Consequently, the U.S. industrial vacancy rate rose by 126 basis points, to 6.8%, as construction activity normalized at year-end to pre-pandemic levels of below 300 million square feet. With supply and demand nearing equilibrium in 2025, the vacancy rate is expected to peak at around 7% before starting to fall again.
Thanks to those market conditions, renters of warehouse space should begin to see some relief from the steep rent hikes they’re seen in recent years. According to Colliers, rent growth decelerated in 2024 after nine consecutive quarters of year-over-year increases surpassing 10%. Average warehouse and distribution rents rose by 5% to $10.12/SF triple net, and rents in some markets actually declined following a period of unprecedented growth when increases often exceeded 25% year-over-year. As the market adjusts, rents are projected to stabilize in 2025, rising between 2% and 5%, in line with historical averages.
In 2024, there were 125 new occupancies of 500,000 square feet or more, led by third-party logistics (3PL) providers, followed by manufacturing companies. Demand peaked in the fourth quarter at 53 million square feet, while the first quarter had the lowest activity at 28 million square feet — the lowest quarterly tally since 2012.
In its economic outlook for the future, Colliers said the U.S. economy remains strong by most measures; with low unemployment, consumer spending surpassing expectations, positive GDP growth, and signs of improvement in manufacturing. However businesses still face challenges including persistent inflation, the lowest hiring rate since 2010, and uncertainties surrounding tariffs, migration, and policies introduced by the new Trump Administration.
As U.S. businesses count down the days until the expiration of the Trump Administration’s monthlong pause of tariffs on Canada and Mexico, a report from Uber Freight says the tariffs will likely be avoided through an extended agreement, since the potential for damaging consequences would be so severe for all parties.
If the tariffs occurred, they could push U.S. inflation higher, adding $1,000 to $1,200 to the average person's cost of living. And relief from interest rates would likely not come to the rescue, since inflation is already above the Fed's target, delaying further rate cuts.
A potential impact of the tariffs in the long run might be to boost domestic freight by giving local manufacturers an edge. However, the magnitude and sudden implementation of these tariffs means we likely won't see such benefits for a while, and the immediate damage will be more significant in the meantime, Uber Freight said in its “2025 Q1 Market update & outlook.”
That market volatility comes even as tough times continue in the freight market. In the U.S. full truckload sector, the cost per loaded mile currently exceeds spot rates significantly, which will likely push rate increases.
However, in the first quarter of 2025, spot rates are now falling, as they usually do in February following the winter peak. According to Uber Freight, this situation arose after truck operating costs rose 2 cents/mile in 2023 despite a 9-cent diesel price decline, thanks to increases in insurance (+13%), truck and trailer costs (+9%), and driver wages (+8%). Costs then fell 2 cents/mile in 2024, resulting in stable costs over the past two years.
Fortunately, Uber Freight predicts that the freight cycle could soon begin to turn, as signs of a recovery are emerging despite weak current demand. A measure of manufacturing growth called the ISM PMI edged up to 50.9 in December, surpassing the expansion threshold for the first time in 26 months.
Accordingly, new orders and production increased while employment stabilized. That means the U.S. manufacturing economy appears to be expanding after a prolonged period of contraction, signaling a positive outlook for freight demand, Uber Freight said.
The surge comes as the U.S. imposed a new 10% tariff on Chinese goods as of February 4, while pausing a more aggressive 25% tariffs on imports from Mexico and Canada until March, Descartes said in its “February Global Shipping Report.”
So far, ports are handling the surge well, with overall port transit time delays not significantly lengthening at the top 10 U.S. ports, despite elevated volumes for a seventh consecutive month. But the future may look more cloudy; businesses with global supply chains are coping with heightened uncertainty as they eye the new U.S. tariffs on China, continuing trade policy tensions, and ongoing geopolitical instability in the Middle East, Descartes said.
“The impact of new and potential tariffs, coupled with a late Chinese Lunar New Year (January 29 – February 12), may have contributed to higher U.S. container imports in January,” Jackson Wood, Director, Industry Strategy at Descartes, said in a release. “These trade policy developments add significant uncertainty to global supply chains, increasing concerns about rising import costs and supply chain disruptions. As trade tensions escalate, businesses and consumers alike may face the risk of higher prices and prolonged market volatility.”
New York-based Cofactr will now integrate Factor.io’s capabilities into its unified platform, a supply chain and logistics management tool that streamlines production, processes, and policies for critical hardware manufacturers. The combined platform will give users complete visibility into the status of every part in their Bill of Materials (BOM), across the end-to-end direct material management process, the firm said.
Those capabilities are particularly crucial for Cofactr’s core customer base, which include manufacturers in high-compliance, highly regulated sectors such as defense, aerospace, robotics, and medtech.
“Whether an organization is supplying U.S. government agencies with critical hardware or working to meet ambitious product goals in an emerging space, they’re all looking for new ways to optimize old processes that stand between them and their need to iterate at breakneck speeds,” Matthew Haber, CEO and Co-founder of Cofactr, said in a release. “Through this acquisition, we’re giving them another way to do that with acute visibility into their full bill of materials across the many suppliers they work with, directly through our platform.”
“Poor data quality in the supply chain has always been a root cause of delays that create unnecessary costs and interfere with an organization’s speed to market. For manufacturers, especially those in regulated industries, manually cross-checking hundreds of supplier communications against ERP information while navigating other complex processes and policies is a recipe for disaster,” Shultz said. “With Cofactr, we’re now working with the best in the industry to scale our ability to eliminate time-consuming tasks and increase process efficiencies so manufacturers can instead focus on building their products.”