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1、FREIGHTWAVES FREIGHTINTEL RESEARCHQ2 SHIPPERRATE REPORTQ2 2023SHIPPER RATE REPORT2TABLE OF CONTENTS(Click to jump to figure/page.)Executive Summary and ForecastQ1 2023 U.S.Bank Freight Payment Index Our Takeaways Q1 2023 Review of Truck Capacity(Supply)Q1 2023 Review of Load Volumes(Demand)Review of
2、 Trucking RatesTrucking Forecast for the Second Quarter of 2023(P)(4)(18)(11)(8)(19)(15)Disclaimer:The analysis and projections expressed within this report were compiled by FreightWaves based on internal data,industry data,and/or data provided by U.S.Bank and do not necessarily reflect the views of
3、 U.S.Bank or BlueGrace Logistics.SHIPPER RATE REPORT3Figure 1:U.S.Consumer spending comes down from holiday bump yet continues to outpace 2022 during most of the quarterFigure 2:Online retail and brick-and-mortar both suffer contraction late in Q1Figure 3:U.S.Consumers continue to accumulate revolvi
4、ng credit debt at a rapid pace,greatly outpacing pre-pandemic levelsFigure 4:The U.S.Industrial economy suffers contractionFigure 5:Freight market key metrics from previous seven quartersFigure 6:National Outbound Tender Volume IndexFigure 7:National Outbound Tender Volume Index year-over-year perce
5、ntage changeFigure 8:U.S.Bank shipment and spend indices(2019-2023 year-to-date)Figure 9:U.S.Bank shipment and spend indices(2021-2023 year-to-date quarterly performance)Figure 10:U.S.Bank regional shipment and spend indices Q1 performance(quarter-over-quarter and year-over-year)Figure 11:National o
6、utbound tender reject indexFigure 12:New class 8 truck orders(ACT research)Figure 13:New class 8 truck orders absolute monthly values(2016-2023 year-to-date)Figure 14:ACT research used truck pricesFigure 15:Average used truck prices by quarterFigure 16:U.S.Customs Maritime Import ShipmentsFigure 17:
7、Inbound Ocean TEUs Volume IndexFigure 18:National Truckload Index(inclusive of fuel)Figure 19:National Truckload Index(linehaul only,excluding fuel)compared to initially reported van contract rates(excluding fuel)LIST OF FIGURESFIG.#PG.#(Click to jump to figure/page.)1(5)(5)2(6)3(6)4(9)9(7)5(11)10(1
8、5)15(7)6(14)13(13)12(12)11(17)16(18)18(17)17(19)19(9)8(8)7(15)14SHIPPER RATE REPORT4Executive Summary and ForecastMarking a pause to years of pandemic-induced volatility,truckload markets observed seasonal trends with surprising faithfulness in the first quarter of 2023.Q1 2022 was unusually disrupt
9、ive in this regard,since it saw an unseasonal spike in freight activity during the so-called“quiet season.”This growth in volumes was primarily driven by shippers anxiety over insecure capacity and their desire to front-load their freight in a period during which capacity is more readily available.N
10、ot so in Q1 2023,when freight demand was appropriately muted before seeing slight yet inconstant gains near the quarters end.There were a number of headwinds for freight markets at the beginning of this year:some recurrent,others recent.Such annual impediments included the decline of import volumes
11、due to Chinas celebration of Lunar New Year,federal holidays in the quarter that briefly took some capacity offline and a smattering of winter storms that disrupted freight flow in certain regions.Stress from the broader economy was also influential,depressing manufacturing activity and eroding cons
12、umer confidence.Accordingly,and despite lingering holiday gains at the start of January,fuel-inclusive spot rates fell 5%from the previous quarter slightly below our previous forecast that they would decline 6%to 8%on a quarterly basis.Depreciating fuel costs were a significant factor in these losse
13、s,as retail diesel prices tumbled 12%from Q4 2022.Even so,these prices remain 8.8%above those of Q1 2022,a period that included the 25.5%spike in retail diesel costs from February to March caused by Russias full-scale invasion of Ukraine.Carrier compliance along contracted lanes also increased in th
14、e quarter,with tender rejections averaging only 3.79%in Q1 2023 appreciably worse than last quarters average of 4.55%and a staggering fall from Q1 2022s average of 18.98%.Looking ahead to Q2 2023,freight markets are subject to downward pressure from all sectors of the economy.Consumer spending will
15、likely be impacted by decreased tax returns this year(per the IRS),exacerbating the current slowdown in retail sales.Manufacturers are broadly pessimistic about business conditions improving in the coming months,constrained as they are by rising interest rates and declining customer demand.This year
16、s produce season,heavily sustained by Californias spring harvests,should prove weaker than usual as California suffered from a barrage of late-winter storms and flooding.Nevertheless,Mays Memorial Day weekend is historically the first major shopping season of the summer,when consumers invest in bulk
17、y durable goods such as furniture,appliances,mattresses and outdoor cooking equipment.Given that last years winter retail season outperformed expectations,there is reason to believe that consumers will make a show of resilience despite mounting financial pressures.In light of these market conditions
18、,we believe spot rates will continue to decline in Q2 by 5%to 8%.While there is still some room for spot rates to fall,smaller carriers are already operating with razor-thin(if not negative)margins.Contract rates should also see a notable decline,given the abundance of pricing power that shippers no
19、w possess.Despite this imbalance,shippers have proven to be reluctant in wielding their leverage over the past few quarters particularly in Q1,when contract rates fell only 4%from Q4,considerably lower than our expectation that they would decline by 7%to 9%.This reluctance points to a residual conce
20、rn of insecure capacity among shippers,and it is thus likely that shippers will continue to exercise caution until recessionary pressures force them to tighten their transportation budgets.SHIPPER RATE REPORT5FIGURE 1:U.S.CONSUMER SPENDING COMES DOWN FROM HOLIDAY BUMP YET CONTINUES TO OUTPACE 2022 D
21、URING MOST OF THE QUARTERFIGURE 2:ONLINE RETAIL AND BRICK-AND-MORTAR BOTH SUFFER CONTRACTION LATE IN Q1Exhibit 13:Total card,retail ex auto and total card ex gas spending per HH,based on BAC aggregated card data(y/y%change of the 7-day moving average of spending levels)Exhibit 16:Online(card not pre
22、sent)and brick&mortar(B&M)retail spending per HH,based on BAC aggregated card data(y/y%change of 7-day moving average of spending levels)SHIPPER RATE REPORT6FIGURE 3:U.S.CONSUMERS CONTINUE TO ACCUMULATE REVOLVING CREDIT DEBT AT A RAPID CLIP,GREATLY OUTPACING PRE-PANDEMIC LEVELS(CHART:FREIGHTWAVES SO
23、NAR,TOTAL REVOLVING CREDIT OUTSTANDING IN BILLION USD)FIGURE 4:THE U.S.INDUSTRIAL ECONOMY SUFFERS CONTRACTION(CHART:FREIGHTWAVES SONAR,PURCHASING MANAGERS INDEX WHITE;RIGHT AXIS COMPARED TO THE NATIONAL FLATBED OUTBOUND TENDER REJECT INDEX GREEN;LEFT AXIS)SHIPPER RATE REPORT7*INCLUSIVE OF FUELFIGURE
24、 5:FREIGHT MARKET KEY METRICS FROM PREVIOUS SEVEN QUARTERSMETRICDAILY AVERAGESTendered Load Volumes Index(OTVI.USA)Tender Rejection Rate(OTRI.USA)Inbound Ocean TEUs Index(IOTI.USA)15,815.7022.46%198.48Q3 202114,296.1918.98%191.27Q1 202214,599.0820.43%179.19Q4 202112,671.649.23%174.24Q2 2022*INCLUSIV
25、E OF FUEL12,140.866.13%120.64Q3 202210,533.164.55%103.71Q4 2022METRICDAILY AVERAGESTendered Load Volumes Index(OTVI.USA)Tender Rejection Rate(OTRI.USA)Inbound Ocean TEUs Index(IOTI.USA)3.3%-8.9%-8.6%Q3 2021-2.1%-7.1%6.7%Q1 2022-7.7%-9.0%-9.7%Q4 2021-11.4%-51.4%-8.9%Q2 2022-4.2%-33.6%-30.8%Q3 2022-3.
26、5%-16.7%-9.8%Q1 202310,160.533.79%93.51Q1 2023-13.2%-25.8%-14%Q4 2022National Truckload Index(NTI.USA)*$3.21$3.42$3.33$2.95$2.75$2.61$2.48National Truckload Index(NTI.USA)*4.6%2.7%3.7%-13.7%-6.8%-5%-5.1%FIGURE 6:NATIONAL OUTBOUND TENDER VOLUME INDEX(CHART:FREIGHTWAVES SONAR,NATIONAL OUTBOUND TENDER
27、VOLUME INDEX YTD 2023 WHITE,COMPARED TO FULL-YEAR 2022 BLUE AND 2021 GREEN AND 2020 ORANGE)SHIPPER RATE REPORT8In the first quarter of 2023,freight markets were found to be abiding once again by seasonal trends.Unfortunately,this return to seasonality occurred during the months of January and Februa
28、ry,traditionally taken together as the“quietest”season for truckload volumes.Many headwinds remained as impediments to growth.Retailers were still contending against high inventory levels,consumer demand was depressed as well as being increasingly directed away from freight-intensive goods and towar
29、d services,manufacturing output was constrained by the lingering inflation of input costs,and the Federal Reserve continued to raise interest rates,discouraging investments for the time being.As a result,the U.S.Bank National Shipments Index fell 0.8%on a quarterly basis.Compared to 2022,first-quart
30、er shipments declined 6.1%.This yearly comparison should be weighed;however,against the knowledge that Q1 2022 was an unseasonably active period as shippers tried to front-load their Q2 freight,fearing insecure capacity.We believe that the volume of freight shipments will remain relatively flat in t
31、he second quarter,despite it being a period in which shippers normally ramp up their activity for the spring and summer shopping seasons.With inflationary pressures still present,consumers are diverting more of their disposable income toward household necessities,such as groceries and gasoline.After
32、 OPEC+announced production cuts in early April,global oil prices have risen from their previous lull,maintaining upward pressure on fuel costs.Reflecting this softer freight environment,the U.S.Bank National Spend Index fell on both a quarterly and yearly basis.Given the broad impact of inflation on
33、 the industry,the National Spend Indexs 0.3%yearly decline,the first year-over-year drop in 10 quarters,was dismaying.But carrier rates were struck down by the sheer abundance of capacity at a time when retail diesel prices were coming down off recent highs,effecting lower transportation spends acro
34、ss the board.The National Spend Indexs slight 0.2%quarterly downtick marked the second consecutive decline at that level.We anticipate a further decline in freight spending on a quarterly basis in Q2,though upward pressure is likely to remain on transportation costs as fuel Q1 2023 U.S.Bank Freight
35、Payment Index Our TakeawaysNATIONAL SHIPMENTS AND SPEND INDEX PERFORMANCESFIGURE 7:NATIONAL OUTBOUND TENDER VOLUME INDEX YEAR-OVER-YEAR PERCENTAGE CHANGE(CHART:FREIGHTWAVES SONAR,NATIONAL OUTBOUND TENDER VOLUME INDEX SHOWN AS A YEARLY PERCENT CHANGE)SHIPPER RATE REPORT9prices rally.Carriers will not
36、 find any pricing power in the coming months,so contract and spot rates alike are expected to fall.Yearly comparisons in freight spending are likely to become more sharply negative,however,as inflation accelerated in late Q1 and Q2 of last year.FIGURE 8:U.S.BANK SHIPMENT AND SPEND INDICES(2019-2023
37、YTD)Source:U.S.BankFIGURE 9:U.S.BANK SHIPMENT AND SPEND INDICES(2021-2023 YTD QUARTERLY PERFORMANCE)Source:U.S.BankSHIPPER RATE REPORT10Regional shipment performance was a mixed bag in the first quarter.The Southwest continued to be a bright spot for freight volumes,building on its previous gains ov
38、er the past three consecutive quarters.The Southwest Regional Shipments Index rose 5%on a quarterly basis and an impressive 14%on a yearly one,sustained by robust activity at Port Houston and an increase in cross-border trade with Mexico.The Midwest was also able to reverse two consecutive quarters
39、of decline in its Regional Shipments Index with quarterly growth of 1.3%.Despite this turnaround,the Midwest is mostly known for shipping grain along the rails and is thus the least active region in terms of truckload freight.Shipments in the Midwest fell 2.4%on a yearly basis.On the other hand,cont
40、inued deterioration was seen elsewhere especially in the Southeast and the West,both regions that suffered from waning activity at coastal container ports.The West Regional Shipments Index fell 2.8%on a quarterly basis and was down 14.1%on a yearly one,marking a sharp downturn in volume at the ports
41、 of Los Angeles and Long Beach.The Southeast Regional Shipments Index was hit harder,declining 10.1%from the previous quarter and 16.1%from Q1 2022.A slowdown in housing starts was also to blame for lackluster freight performance in both of the regions,itself caused by elevated interest rates sustai
42、ned by the Federal Reserve.Finally,the Northeast Regional Shipments Index had a poor showing on a quarterly and yearly basis,posting respective declines of 4.8%and 13.8%.High interest rates are again behind this downturn,as they are weighing heavily on manufacturing output in Philadelphia and New Yo
43、rk.Diesel shortages have also been pronounced in the region,made worse in Q1 by diesels alternate use as a source of heating.Contrary to the national index,nearly all regions saw healthy gains in transportation spending,with the Midwest singled out as the sole exception.Marking an imbalance between
44、abundant capacity and insufficient demand,the Midwest Regional Spend Index tumbled 5.3%on a quarterly basis and 8%on a yearly one.Yet,excepting the general effects of broad inflation,the other regions gains in freight spending are not so easily understood.Some of the Wests 2.8%yearly gain in transpo
45、rtation costs can be attributed to the regions 6%yearly growth of retail diesel costs.But what of the 6.9%quarterly growth in the West Regional Spend Index?California suffered from severe winter storms:Such weather typically disrupts capacity,forcing carrier rates higher.Washington was also found la
46、cking capacity during its seasonal apple harvest,a lack made doubly expensive by the need for timeliness in shipping refrigerated freight such as produce.Spending gains across other regions are similarly subject to parochial explanations.The Southwest,which saw its Q1 Regional Spend Index rise 5.7%o
47、ver last quarter and 16.7%over last year,saw a surge in flatbed activity from the oil and gas sector.Given the tight schedule of drilling operations,such flatbed freight is usually lucrative since it requires precise coordination in a narrow time frame.In the Northeast,due to the aforementioned dies
48、el shortages,capacity was somewhat tighter and so spending in the region rose 2.2%on a quarterly basis and 2%on a yearly one.Finally,an exodus of small and midsize carriers was especially concentrated in the Southeast,due both to higher operating costs in the region and the sudden absence of volumes
49、 coming from the ports of Charleston,South Carolina,and Savannah,Georgia.The Southeast Regional Spend Index ticked up 1.8%over last quarter and jumped 7.8%over Q1 2022.REGIONAL SHIPMENTS AND SPEND INDEX PERFORMANCESSHIPPER RATE REPORT11FIGURE 10:U.S.BANK REGIONAL SHIPMENT AND SPEND INDICES Q1 PERFOR
50、MANCE(QUARTER-OVER-QUARTER AND YEAR-OVER-YEAR)Source:U.S.BankFor the seventh consecutive quarter,shippers found capacity easier to secure in Q1.At the beginning of the year,carriers inherited a rising tide that kept rejection rates above 5.5%.But capacity quickly came back online once the winter hol
51、idays passed,dragging tender rejections to their lowest level since May 2020.From there,rejection rates continued to decline stepwise over the quarter,threatening to outdo even the extreme,pandemic-induced low of 2.57%.The wide spread between contract rates and spot rates has proved to be a sufficie
52、nt incentive for carriers to cling to their contracted loads.Whenever contract rates are substantially higher than spot rates,a cyclical reaction forms that effects lower tender rejections,since lower tender rejection rates lead to fewer loads falling to the spot market,which in turn causes spot rat
53、es to cool and carriers to accept contracted freight more readily.Tender rejections are largely driven by two forces.The first,and most common,scenario occurs when carriers abandon previously contracted freight to pursue higher-paying opportunities in the spot market.But as has already been describe
54、d,spot rates were locked in a downward spiral throughout most of Q1,lowering tender Q1 2023 Review of Truck Capacity(Supply)SHIPPER RATE REPORT12rejection rates.In addition to increased compliance along contracted lanes,shippers that moved freight in the spot market also found that carriers were unu
55、sually eager to accept their loads often at bargain prices.The second factor behind an increase in tender rejections is a sheer lack of capacity witnessed in a volatile market.The ongoing semiconductor crisis prevented new truck orders from being fulfilled;accordingly,prices for used trucking equipm
56、ent spiraled upward.Despite these limiting factors,new entrants continued to flood the trucking industry,seduced by lucrative rates in the spot market.Sadly,these new arrivals purchased used equipment that was heavily overpriced.Now overleveraged with payments on such expensive equipment,these new e
57、ntrants are desperate to tread water and remain solvent for as long as possible,and they are thus willing to move freight with thinner margins.But time is running out for such carriers,as witnessed in Q1s string of bankruptcies.It is worth remembering that the trucking industry is highly decentraliz
58、ed;fewer than 3%of fleets operate with 20 or more power units.This fragmentation made Q1s exodus of carriers,some boasting fleets of nearly 200 trucks,all the more concerning.In addition to the total destruction of some capacity,other carriers and logistics firms cut their workforce in sweeping layo
59、ffs.Despite this early wave of departures,capacity remains abundant on a national scale.Absent a surge in freight demand or an acute worsening of carriers finances,this plenitude of capacity is likely to persist into the coming quarters.FIGURE 11:NATIONAL OUTBOUND TENDER REJECT INDEX(CHART:FREIGHTWA
60、VES SONAR,NATIONAL OUTBOUND TENDER REJECT INDEX YTD 2023 WHITE,COMPARED TO FULL-YEAR 2022 BLUE AND 2021 GREEN AND 2020 ORANGE)Compared to 2022,bookings of new Class 8 truck orders in the first quarter fell by an average of 1.5%.Although indicating declining demand,this performance is quite impressiv
61、e considering the weakness both in the trucking industry and the broader economy.New orders are currently benefiting from pent-up demand,as enterprise carriers seek to replace their aging equipment after being unable to do so during the height of the semiconductor shortages in CAPACITY NEW CLASS 8 T
62、RUCK ORDERSSHIPPER RATE REPORT13FIGURE 12:NEW CLASS 8 TRUCK ORDERS(ACT RESEARCH)Source:ACT Research,FreightWaves2020-21.This tailwind will likely dissipate soon,as ACT Research estimates the number of catch-up builds to total only 60,000.There is a risk that OEMs(original equipment manufacturer)back
63、logs,which are still of record length,are masking a slowdown in orders.If so,it is reasonable to expect orders to remain unseasonably stable in the coming months,since the summer is historically a weaker period for bookings.In any case,new orders are ticking along at an annualized rate of 245,646 tr
64、ucks for 2023.Without any significant gains in the back half of the year,this figure will remain insufficient to meet ACT Researchs estimate of replacement demand,which sits at 275,000.SHIPPER RATE REPORT14Source:ACT Research,FreightWavesJANMAYMARJULOCTFEBJUNSEPAPRAUGNOVDECMONTHLYAVGREPL.RATEMONTHLY
65、R.R.Y/YCHANGEANNUALIZED201621,04153,27121,30111,02532,63021,00642,35920,89230,623298,49324,874275,00022,917298,493201922,18816,94022,57323,21518,72632,63723,24518,10436,09224,00721,213296,50924,709275,00022,91758.88%296,50937,56920,475275,00022,917-79.42%245,6962017490,12940,844275,00022,91765.3%490
66、,129202049,13635,72142,78146,59352,61828,11440,27142,21343,52634,73553,04021,381278,29623,191275,00022,91753.76%278,296202217,2047,6324,2516,69016,01020,35919,38930,76839,08952,10450,76014,040355,32029,610275,00022,91727.68%355,320202342,30740,04933,35323.07225,82425,87637,09627,32323,3919,90222,937
67、44,190Y/Y-7.1%-11%13.3%M/M-39.18%-20.09%27.74%186,62815,552275,00022,917-35.59%186,628201818,29714,22413,88016,23310,35819,44018,07812,95513,90713,67614,19421,386180,99515,082275,00022,917-63.07%180,995202116,10510,88612,69215,78310,29817,48316,85412,97921,86414,85911,11920,073FIGURE 13:NEW CLASS 8
68、TRUCK ORDERS ABSOLUTE MONTHLY VALUES(2016-2023)Prices of used trucking units continued to moderate in Q1 as the inhospitable spot market environment rebuffed new drivers from entering the industry and compelled some existing carriers to relinquish their authorities(and thus sell their equipment).The
69、 initial rise in used truck prices seen in 2021 was a result of record-high spot rates tempting new recruits at a time when fulfillment of new Class 8 truck orders was constrained by component shortages.As can be seen in the graph below,the rapid appreciation of the past two years was not only unpre
70、cedented but also unsustainable.Given the current market downturn,used prices are falling off their highs as those carriers exiting the industry struggle to recoup their investments.Although they still remain elevated above the more stable levels of 2017-18,Q2 should see used truck prices continue t
71、heir return to normalcy.CAPACITY USED TRUCK PRICESShortfall/(Overcapacity)-1%-1%1%-9%0%-3%4%4%-15.99%15,82014,08115,44418,62421,30123,790SHIPPER RATE REPORT15FIGURE 14:ACT RESEARCH USED TRUCK PRICES(CHART:FREIGHTWAVES SONAR,ACT RESEARCH PRICE FOR 3-YEAR-OLD TRUCKS WHITE,4-YEAR-OLD TRUCKS ORANGE AND
72、5-YEAR-OLD TRUCKS GREEN)January historically marks the beginning of the“quiet season”in truckload markets.In this regard,freight demand was consistently seasonal throughout the first quarter of 2023.Comparisons made on a quarterly basis are relatively appropriate;although Q4 volumes are constrained
73、by several holiday weeks,so too are volumes in Q1.Most notably,domestic truckload volumes suffer from the dearth of imports effected by Chinas celebration of Lunar New Year.Q4 volumes typically benefit from the wave of last-minute holiday shipments,giving it a slight advantage over Q1,though the two
74、 quarters are traditionally quite comparable.Comparisons made against Q1 2022 are not,however,greatly informative.Last year saw an unusual spike in shippers activity during its so-called quiet season,since shippers were primarily frustrated with their inability to secure affordable capacity in the y
75、ear prior.Thus,instead of resting during January,shippers broadly sought to take advantage of the seasonal lull by front-loading much of their freight in Q1 2022.A better point of comparison would therefore be Q1 2019,when the industry was in the throes of its last recession.Yet freight demand in Q1
76、 2023 solidly outperformed that of Q1 2019 despite headwinds blowing from Q1 2023 Review of Load Volumes(Demand)FIGURE 15:AVERAGE USED TRUCK PRICES BY QUARTERAVERAGE USED TRUCK PRICES BY AGE3 years old4 years old5 years old$89,398$74,844$61,426Q3 2021$107,290$86,858$71,223Q1 2021$90,561$72,354$59,75
77、4Q4 2021$134,338$109,191$83,852Q2 2022Source:ACT Research,FreightWaves$132,757$110,559$87,238Q3 2022$132,757$92,114$87,238Q4 2022$103,709$83,491$68,095Q1 2023SHIPPER RATE REPORT16multiple directions,indicating that the markets current imbalances are not caused by collapsing demand but rather by an e
78、xcess of capacity.But even if the market sheds this excess capacity over the coming quarters,freight demand will still have to account for numerous barriers to growth in any near-term forecast.In March,the second-and third-largest bank failures in U.S.history occurred swiftly and with little warning
79、,triggering either a pause or slowdown in interest rate hikes across numerous central banks.A reduction in fiscal tightening runs the risk of further extending an already-prolonged fight against inflation;while global commodity markets initially took a huge blow as recessionary fears abounded,a surp
80、rise round of production cuts from OPEC+in April pushed crude oil prices back to levels set at the start of 2023.Given that prices of gasoline and diesel which had been falling over the past few quarters have proven to be much stickier than those of oil,it is likely that consumers discretionary budg
81、ets will once again be eroded at the pump this summer.The timing of such erosion could hardly be worse,since fuel consumption normally ticks up during the warmer months.Sales data from major retailers has also shown that consumers are focusing more on food and household essentials as opposed to bulk
82、y durable goods and other discretionary purchases.This weakness could easily persist into May,when freight demand typically gets a boost from the Memorial Day shopping season.In June,the U.S.Supreme Court is expected to announce its decision on the legality of the Biden administrations student loan
83、forgiveness plan.If the loan forgiveness is blocked,which remains a distinct possibility,many consumers will tighten their budgets even further.Even if the forgiveness is approved,student loan repayments are expected to resume in mid-to late August after three years of forbearance,it is probable tha
84、t borrowers are not fully prepared for this resumption.These payments will weigh heavily on freight activity during the back-to-school and early fall shopping seasons,which would otherwise be significant drivers of volumes.Turning to the ocean,Chinas celebration of Lunar New Year was predictably a h
85、indrance to import volumes during that two-week period.Historically,this lull is also balanced by a surge in trans-Pacific bookings immediately prior to the holiday,as shippers scramble to extradite their freight before Chinese ports and manufacturers shut down.No such surge was to be found in 2023
86、however,volumes remained far beneath their levels of years prior.Such comparisons are not especially fair,since U.S.demand for Chinese imports was at record levels during the pandemic surge.Yet this lack of activity betrays the underlying weakness of Chinas current position;although China is eager t
87、o recoup previous losses in manufacturing output,demand from the U.S.and elsewhere is simply not present.SHIPPER RATE REPORT17FIGURE 16:U.S.CUSTOMS MARITIME IMPORT SHIPMENTS(CHART:FREIGHTWAVES SONAR,CONTAINERIZED AND NON-CONTAINERIZED U.S.CUSTOMS MARITIME IMPORT SHIPMENTS YTD 2023 WHITE,COMPARED TO
88、FULL-YEAR 2022 GREEN AND 2021 BLUE AND 2020 ORANGE)FIGURE 17:INBOUND OCEAN TEUS VOLUME INDEX(CHART:FREIGHTWAVES SONAR,INBOUND OCEAN TEUs VOLUME INDEX BY DEPARTURE DATE FROM THE ORIGIN PORT YTD 2023 WHITE,COMPARED TO FULL-YEAR 2022 GREEN AND 2021 BLUE AND 2020 ORANGE)“This quarter was a prime example
89、 of how important it is to examine regional data when assessing truck freight shipments in the U.S.Boostedby growing truck-transported trade with Mexico and increased activity at the Port of Houston,truck freight activity in the Southwest region is markedly different than what were seeing in other r
90、egions.”Bobby Holland,Director of Freight Data Solutions,U.S.BankSHIPPER RATE REPORT18While it might be tempting to focus on their predicted decline throughout the first quarter,contract rates actually avoided their worst-case scenario.Q1 was a season in which shippers bid cycles regardless of wheth
91、er they were conducted on a yearly,monthly or quarterly basis aligned.Prior to this quarter,the fact that contract rates had not declined with the rapidity of spot rates could be attributed to those shippers that were locked into yearlong agreements.Instead,it appears that shippers,having been burne
92、d by supply chain mayhem in 2020-21,are acting with an abundance of caution.This theory has additional support by the fact that lead times or the period between a shippers request for capacity and when the load is scheduled to move are still continuing to rise,even though capacity has become increas
93、ingly available over the past year.Moreover,truckload activity was unusually high in Q1 2022,indicating proactive measures to front-load freight in a traditionally quiet season rather than noisily competing for capacity in the busy spring.Accordingly,contract rates(which are exclusive of fuel and ot
94、her accessorials)settled into an average of$2.55 per mile for the quarter.Though this figure does represent a 4%decline from the previous quarters average,contract rates outperformed the 7%to 9%decline forecast.Spot rates,on the other hand,performed about as expected which is to say,poorly.The Natio
95、nal Truckload Index(NTI),a seven-day moving average of national dry van spot rates that is inclusive of fuel and other accessorials,consistently tumbled from its holiday highs throughout the quarter.Averaging$2.48 per mile in Q1,the NTI fell 5%from the previous quarter,slightly below the forecast 6%
96、to 8%decline.Comparisons made on a yearly basis reveal a dire outlook for carriers,especially since operating expenses have continued to rise with inflation.Contract rates were down by a quarterly average of 11%from 2022,whereas the NTIs quarterly average fell 27.5%over that same period.Review of Tr
97、ucking RatesFIGURE 18:NATIONAL TRUCKLOAD INDEX(INCLUSIVE OF FUEL)(CHART:FREIGHTWAVES SONAR,NATIONAL TRUCKLOAD INDEX YTD 2023 WHITE COMPARED TO FULL-YEAR 2022 BLUE AND 2021 GREEN AND 2020 ORANGE)SHIPPER RATE REPORT19FIGURE 19:NATIONAL TRUCKLOAD INDEX(LINEHAUL ONLY,EXCLUDING FUEL)COMPARED TO INITIALLY
98、 REPORTED VAN CONTRACT RATES(EXCLUDING FUEL)(CHART:FREIGHTWAVES SONAR,NATIONAL TRUCKLOAD INDEX,LINEHAUL ONLY 2022-3 WHITE,RIGHT AXIS COMPARED TO INITIALLY REPORTED VAN CONTRACT RATES GREEN,LEFT AXIS)“Volumes continue to be soft through the first part of Q2,weather has impacted the traditional start
99、of produce season and CPG and retail continue to be slow.We are seeing tender acceptance remain at record levels,and as a result,the spot market is very light.We believe that capacity will continue to leave the market and rates will increase in late 2023.”Scott Schara,CCO and President of 3PL Servic
100、es,BlueGrace LogisticsAt its March meeting,the Federal Open Market Committee stated expectations for a“mild recession starting later this year,”with the recovery expected to last over the next two years.While a recession is never exactly welcome news,this forecast should imply that the Feds job of b
101、ringing inflation to heel is either done or nearly so.Yet hawkish comments from Fed officials soon dashed this inference:Fed Gov.Christopher Waller said that“monetary policy needs to be tightened further”since“financial conditions have not significantly tightened,the labor market continues to be str
102、ong and quite tight,and inflation is far above target.”Trucking Forecast for the First Quarter of 2023SHIPPER RATE REPORT20Our team at FreightWaves expects spot rates to decline 5%to 8%during the second quarter of 2023.This estimate is unorthodox given the usual seasonality of freight,but it is made
103、 against the current economic downturn and faltering consumer demand.One likely source of upward pressure on all-in spot rates will be rising diesel prices,which should inflate due to higher oil prices and fears of inventory shortages.While shippers did not fully exercise their pricing power in Q1 c
104、ontract negotiations,preliminary data from April suggests that they are still seeking incremental declines.We anticipate that contract rates will fall by 2%to 4%over the coming quarter.Large carriers,in their most recent round of earnings calls,have acknowledged the reality of a current“freight rece
105、ssion”and have adjusted their guidance accordingly.Even so,shippers are broadly showing restraint by keeping the spread between contract and spot rates high.RATE INFLATION FORECAST FOR Q1 2023With the aforementioned signal that produce volumes will be weaker than normal,Q2 is unlikely to abide by tr
106、aditional seasonality.That volumes were unseasonably flat in Q1 made for a favorable comparison,but freight demand historically builds in late March and continues to rise throughout Q2.This increasing demand is also driven by retailers that are cycling in inventory for the summer shopping season,the
107、 first sign of which is the Memorial Day weekend in late May.But consumers have shown little appetite for discretionary retail spending and retailers are continuing to struggle to clear their current stocks.SEASONALITY CONSIDERATIONSThe prospect of further monetary tightening does not bode well for
108、manufacturers,which have expressed their pessimism in a series of April surveys conducted by Federal Reserve Banks.The Philadelphia Feds Manufacturing Business Outlook Survey,for instance,showed that fewer than a third of manufacturers expect business conditions to improve over the next six months.S
109、urvey respondents also anticipate that prices paid for inputs will rise faster than prices received for goods.An additional mode-specific headwind will be present in Q2 2023.Produce season,which begins in the states of Texas and Florida before centering around California in the late spring,will be t
110、hreatened by late-winter storms.Californias spring harvest of lettuce,strawberries and other seasonal crops was disrupted by heavy flooding in the region,ultimately leading to weaker yields and reefer volumes.Farmers were also prevented from planting summer crops like tomatoes because of the floodin
111、g.The barrage of precipitation has oversaturated the soil in some parts of California,making trees more susceptible to uprooting by heavy winds and potentially causing further power outages in the region.These barriers to growth in Californias freight markets come at an unfortunate time,given carriers present need for volumes.FreightWaves Freight Intel ContactMichael RudolphResearch AFREIGHTWAVES FREIGHTINTEL RESEARCHQ2 2023