U.S. freight market reverses gains in third quarter as volumes fall

Core Insights - The U.S. truck freight market experienced a downturn in the third quarter, reversing a brief improvement seen in the second quarter, with national shipment volumes declining by 2.9% and shipper spending increasing by 2% [1][2] Freight Volume and Costs - There is a notable divergence between decreasing freight volumes and rising freight costs, indicating that carriers are exiting the market despite higher rates being paid for freight [2] - Freight shipments decreased by 10.7% year-over-year, while freight spending fell by 1.7% compared to the previous year [2] Economic Factors Impacting Freight - Tariffs and a slowdown in the goods economy, particularly in housing and consumer spending, are negatively affecting freight volumes [3] - Key sectors such as manufacturing, construction, and consumer goods spending are under pressure, contributing to the challenges faced by the freight market [4] Manufacturing Insights - The U.S. manufacturing sector is the second-largest globally, accounting for over 15% of total worldwide manufacturing output, with tariffs adversely impacting factory output [5] - Most manufacturing indicators show little growth or even decline, which is significant as manufacturing is a major source of freight for trucking [5] Rate Trends - Despite fewer shipments, rates for both contract and spot freight improved, with spot-market rates increasing by 3 cents per mile (1.4%) and contract rates by 3 cents per mile (1.1%) compared to the second quarter [6]