JOC | Spring Brings Little Heat to US Freight Economy

05.20.16 | William B. Cassidy, JOC

Spring is late arriving for many U.S. shippers and transport providers, but there are signs the U.S. economy may be warming enough to generate higher freight volumes. How much higher largely depends on uncertain consumer spending plans.

As produce season sprouted across the Sunbelt, spot truckload volumes rose in early May, but then dropped slightly in the most recent week, according to data from and DAT Solutions. Home improvementretail sales at Home Depot and Lowe’s were strong in the first quarter and April, though sales were weak at department stores. 

What the freight business needs to accelerate from that standstill is a stronger jolt from U.S. consumers, said Jonathan Starks, COO of transportation research firm FTR, a partner of “We’ve had one good month, other than that it (retail demand) has been pretty flat for quite a while,” Starks said.

Produce shipments are the exception. "Loads out of California are up almost 20 percent versus last year, where in other places they’re down as much as 10 percent to 20 percent," said Starks. "That’s an indication of the produce environment."

In March, inventories made their biggest leap since last June, rising 0.4 percent, the U.S. Census Bureau said. Retail inventories rose fastest at 1 percent seasonally adjusted, perhaps in advance of spring sales. Excluding motor vehicles, retail inventories also rose 0.4 percent.

But Starks said the biggest inventory buildup over the past year has been at wholesalers, in the warehouse. The rapid growth of e-commerce is making it more difficult for retailers to determine the appropriate amount of inventory to carry to support in-store and online sales, he said.

“Everyone’s trying to figure out what e-commerce will mean going forward, and whether retailers will have to have inventory in two places, and more than they really need,” said Starks.

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