Just a glimmer down the road for US trucking

On the heels of a disappointing Q4 that pushed it behind earnings targets, Knight-Swift, the largest of the US truckload carriers, intends to expand through an acquisition in the LTL sector, while expecting a challenging first half for its core segment.

Shipments by truck in the fourth quarter suffered their largest drop since the height of the pandemic, according to the US Bank Freight Payment Index.

While Knight-Swift Transportation’s management had braced for a subdued spot market and infrequent project activity, general freight demand turned out to be “significantly worse than anticipated”, revealed CFO David Miller in the earnings call following the results announcement, on 23 January.

This demand slump drove a 41% drop in operating income, compared with the fourth quarter of 2021.

US Bank data shows US trucking volumes in Q4 22 down 7.1% year on year – a magnitude of decline not seen since the third quarter of 2020. The shipment count in Q3 22 was 4.6% down on Q3 21.

Both the For-Hire Truck Tonnage Index of American Trucking Associations (ATA) and the Cass Freight Shipments Index showed consecutive declines from September through December.

“A pullback in consumer spending is causing the truck freight market to soften,” said ATA SVP and chief economist Bob Costello. “At the same time, monetary policy changes are reducing demand for large-ticket items in interest rate-sensitive areas like autos and homes.”

Knight-Swift president and CEO David Jackson blamed the slowdown largely on moves by importers to bring in goods early to avoid supply chain snare-ups, and does not expect the coming months to be much better.