Freight demand across the U.S. is showing signs of softening heading into the peak fall shipping season, in a turnaround from the rush to restock that strained capacity and led to surging prices last year.
Freight rates are pulling back from historic highs, according to trucking-sector measures, and executives say the flood of shipments from retailers and manufacturers is flattening out and even falling in some markets as high inflation and shifting consumer buying patterns leave many companies overstocked.
The closely watched Cass Freight Index, which measures shipping demand in the U.S., declined 1.7% from June to July, the second straight month-to-month drop. The index released Monday by Cass Information Systems Inc., edged up 0.4% from a year ago but it remains barely above its level in January.
Freight rail volumes are faltering, declining 2.6% overall in the first week of August from the same week last year after barely growing in July, according to the Association of American Railroads. Intermodal traffic, in which railroads carry containers and truck trailers in operations that are most sensitive to consumer demand and international trade, was down 3.4% year-over-year last week.
Mark Rourke, chief executive of Green Bay, Wis.-based truckload carrier Schneider National Inc., said in a July 28 investor earnings call that the market chaos over the past two years is moderating.
Shipment counts at Thomasville, N.C.-based Old Dominion Freight Line Inc., one of the largest U.S. truckers, had been growing at a double-digit pace over recent quarters but expanded only 2.8% in the second quarter. Chief Executive Greg Gantt said shipping demand is following more stable, seasonal patterns following volatile and unpredictable swings during the pandemic.
“I would say that we’re a little bit below our normal seasonality,” Mr. Gantt said in a July 27 earnings conference call.