U.S. Bank Freight Payment Index™: Strong Gains in Q4 Ahead of Anticipated Tariff Increases in Early 2019
January 23 2019 - 9:00AM
Business Wire
The U.S. Bank Freight Payment Index™ – a tool designed to assess
the current state of the freight industry in the United States –
showed signs of a spending rebound compared to the third quarter in
2018, with indications that growth will continue, but at a slower
rate in 2019.
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Overall freight shipment and spend rate
changes from Q3 vs. Q4 2018 and Q4 2018 vs. Q4 2017. (Graphic: U.S.
Bank)
Solid holiday sales, increases in wages and employment, and
better-than-expected container volumes into West Coast ports
contributed to the rebound, according to Bob Costello, a freight
industry analyst and chief economist for the American Trucking
Associations. Costello found that higher shipping and spending
volumes into West Coast ports were likely a result of companies
ordering their imports from China earlier than usual, as tariffs on
many goods were expected to rise from 10 percent to 25 percent in
early 2019. Many shippers had already imported products in the last
quarter of 2018 to avoid paying the higher rate in the new
year.
“The nice rebound from the slower third quarter shows that the
current economic growth cycle is not at risk of ending soon,” said
Costello. “However, the indexes still indicate that trucking, as
well as the broader economy, should expect decelerating growth
rates in the quarters ahead due to tariff tax increases, driver
shortages and possible interest rate hikes.”
The Northeast saw an increase in shipments and spending in the
last quarter of 2018, which can be attributed to holiday sales
volumes in this population dense region. The Midwest, Southeast and
Southwest regions had declines in shipments due to a variety of
factors such as lower than expected construction activities and
predictions of moderate auto production in 2019. Specific regional
data can be found in the index.
“Freight companies have dealt with a variety of industry
challenges throughout the year, and the index reinforces what we’ve
heard from customers and what uncertainties we can see in 2019. At
U.S. Bank, we have the benefit of working with customers from
industries of all types, and can put that knowledge and insight to
work for our transportation customers. Now is the time to think
ahead and position businesses in a way that makes the uncertainty
less of a factor on the end results,” said Bobby Holland, U.S. Bank
vice president and director of Freight Data Solutions.
U.S. Bank pioneered electronic freight payment more than 20
years ago. The U.S. Bank Freight Payment Index measures
quantitative changes in freight shipments and spend activity based
on data from transactions processed through U.S. Bank Freight
Payment. The business processed more than $27.6 billion in 2018 for
some of the world’s largest corporations and government
agencies.
About U.S. BancorpU.S. Bancorp, with 74,000
employees and $467 billion in assets as of December
31, 2018, is the parent company of U.S. Bank, the
fifth-largest commercial bank in the United States.
The Minneapolis-based bank blends its relationship teams,
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customers to bank how, when and where they prefer. U.S.
Bank is committed to serving its millions of retail, business,
wealth management, payment, commercial and corporate, and
investment services customers across the country and around the
world as a trusted financial partner, a commitment recognized by
the Ethisphere Institute naming the bank a 2018
World’s Most Ethical Company. Visit U.S.
Bank at www.usbank.com or follow on social media to
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version on businesswire.com: https://www.businesswire.com/news/home/20190123005105/en/
Dana Stone, U.S. Bank Public Affairs &
Communications651-435-7908
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