Narrator [00:00:04]:

Welcome to Supply Chain Now, the voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today's critical issues, the challenges, and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.

Scott W. Luton [00:00:32]:

Kim, how you doing today?

Kim Reuter [00:00:33]:

I'm doing great. A little chilly. I don't know, like we had winter and then we had some spring and now it looks like we're back to winter again.

Scott W. Luton [00:00:41]:

It is. Hey, it's tough to keep up with, but this warmer down here in the Atlanta area, I want to say it's gonna hit 70 degrees today. How about that?

Kim Reuter [00:00:49]:

Lucky you. Yeah. The Mid-Atlantic still struggling.

Scott W. Luton [00:00:52]:

Well, great to have you back amidst your world travels. We got a great show here today, folks. Today's episode is part of our popular long running quarterly series. We're going to be sharing key insights from one of the leading transportation industry resources, the U.S. Bank Freight Payment Index for Q4, 2024. So not only are we going to be diving into what the data is telling us, but we're going to marry that with boots on ground in market practitioner perspective. Kim, here's some valuable context because we don't get enough context in today's fast moving world. This the U.S. Bank Freight Payment Index, which is released every quarter.

Scott W. Luton [00:01:27]:

It offers tons of intriguing insights. It's based on massive amounts of data processed through U.S. Bank. In fact, Kim, U.S. Bank processed $43 billion worth of transactions in 2024 alone. And all of that many, many reasons. Those are some of the biggest reasons why U.S. Bank is such a great resource for this kind of information, this kind of discussion for business leaders everywhere.

Scott W. Luton [00:01:52]:

Kim. Should be a great show, huh?

Kim Reuter [00:01:54]:

Wonderful show. I've had the privilege of being a part of this discussion previously with U.S. Bank and it's always insightful to understand what's going on with logistics. Not only is it a great look back on what happened in Q4 and I think we're going to be kind of surprised when we look at what we've discovered, but it's also a great indicator of what we're going to be working into in 2025.

Scott W. Luton [00:02:13]:

That is right. That is right. Kim, it's great to have you back. I love hearing your take on these topics. We're going to be working through and looking forward to a big show. I want to introduce back by popular demand, the one and only Bobby Holland, Director, Freight Business Analytics at U S Bank. And he's joined by Ken Adamo, Chief of Analytics With DAT Freight & Analytics. Hey, hey, hey, Bobby. How you doing today?

Bobby Holland [00:02:39]:

Doing well. How are you guys?

Scott W. Luton [00:02:39]:

Wonderful. Great to see you. And Ken, it is finally great to meet you. I've enjoyed our pre show conversations. Welcome in.

Ken Adamo [00:02:46]:

Thank you for having me.

Scott W. Luton [00:02:47]:

You bet, you bet. All right folks, y'all know where we like to start. Kim Reuter. I like my fun warm up questions. And folks, right now, probably for many of you all out there, football is top of mind. We got quite the big game just around the corner. But before we get there with Bobby and Kim, Ken, I want to talk college football with you. Congrats on the Ohio State Buckeyes winning it all this year in college.

Scott W. Luton [00:03:11]:

Man, what a season. What was one of your favorite moments from this year?

Ken Adamo [00:03:15]:

So I'm a season ticket holder, I'm an alum. My favorite moment was I sat in the stands to that inexplicable loss to that team up north, froze my butt off on that day and made a last minute decision to take my 9-year-old to the playoff game against Tennessee. And and watching us absolutely stomp them while they were playing Rocky Top is probably one of my greatest sporting memories of all time. So I still have Rocky Top stuck in my head, honestly. But that's the music that sets the tone for them getting stomped by Ohio State initially.

Scott W. Luton [00:03:47]:

All right, so to all of our, that sounds like a wonderful trip, especially with your 9 year old. That is awesome. And to all of our UT fan friends and f family members out there, hey, you're see your big season's just around the corner, I'm sure. Okay, Bobby, big games coming up. You've joined us for dozens of shows. We have documented several things about your non data, non supply chain portion of your life, including some of your grilling that you've done. So what do you plan to cook up for the big game in a few days?

Bobby Holland [00:04:14]:

We are doing steaks.

Scott W. Luton [00:04:16]:

What is your favorite type of cut of the steak, Bobby?

Bobby Holland [00:04:21]:

New York strip aged.

Scott W. Luton [00:04:25]:

Nice. That is highfalutin. I might have to get your marinade or no marinade.

Bobby Holland [00:04:30]:

No marinade.

Scott W. Luton [00:04:31]:

No marinade. Okay. When you got good quality meat. That's right. All right, Bobby, send us pictures. I bet you cook a mean steak. Oh, I love it. Love it.

Scott W. Luton [00:04:42]:

Now we're starving. Right Kim, you get the toughest question. So Ken has shared about some one of his highlights from an incredible Buckeye season. Bobby's made us hungry with what the family's gonna be cooking up this weekend and you are gonna weigh in and give us a winning Ticket. Who's winning a big game, the Chiefs or the Eagles?

Kim Reuter [00:04:58]:

Now, I'm gonna make everybody angry and I'm just joking. I'm gonna go with the Eagles. I'm an east coast girl. I affiliated with Philly, and I think that the Eagles are going to take it. That is the depth of my knowledge, by the way. So besides that, it's a Bird and the Seahawks are also a Bird and Seahawks, my number two picks.

Scott W. Luton [00:05:15]:

Okay. All right. Well, hey, a lot of folks are agreeing with you, I think, right? The Chiefs, they have had a tall task to win the big game three years in a row. Unprecedented. And of course, the Eagles have a great story, so we'll see what happens. I bet we're all pulling for a good close game. All right, so Ken, Bobby and Ken, we got a lot to get into here today and we'll get to work here. So, folks, you should know out there, there's some really big news related to this fourth quarter 2024 edition of the U.S. Bank Freight Payment Index as the team has combined forces with a fellow powerhouse in DAT Solutions and DAT Freight & Analytics.

Scott W. Luton [00:05:54]:

So, Bobby, how did this big time partnership come together?

Bobby Holland [00:05:59]:

Well, we've been looking for a while, we've been talking to DAT about various possible projects. As you know, being in freight business, analytics data is always top of mind. And it just worked out that we recently reached out and really started, you know, serious partnership. And, you know, those things are still going on in the background. However, this was our first toe in the water, so to speak, on how we could work together. We're always talking about rates and the impact of rates on the marketplace in our index. And so we felt like this was a good starting place in order also as well to enhance the Freight Payment Index. So more to come.

Scott W. Luton [00:06:41]:

More to come, more to come. And Bobby, that's a great segue because, Ken, I would love for you to share without having to kill us for what you do share. What does lie ahead in terms of this collaboration?

Ken Adamo [00:06:51]:

The industry over 12 years ago, there's so many. There's such a diverse set of data points and what I like to call mileage markers out there that exist now that weren't as easily available or as high quality as before. So I think, you know, working with partners like U.S. Bank are what the industry is gravitating towards. You know, companies that maybe one sees a little bit more one corner of the market and the other sees the other corner of the market and they're able to bring that together for their customers. So I see. You know, we've doubled down on partnerships at dat. We've staffed an entire new department. It's new to me.

Ken Adamo [00:07:24]:

I took it over in the last year. You know, chief of analytics. Running a corp dev and partnership wing of the company is a bit of a strange bedfellow, but it kind of works. So I'm, I'm really excited about how we can create joint value for customers out there.

Scott W. Luton [00:07:38]:

Hey, we are too. We are too. Before I get Kim's comment, folks, if you're a regular consumer of the Freight Payment Index, you're going to see new data such as this here. These freight rates broken out by quarter in a variety of different channels powered by our friends Ken and dat. So stay tuned for, for that Kim. You know, as Bobby and Ken are talking about this new exciting partnership and look forward how it plays out into our quarterly programming here. It just reminds me there's always a way to find good, successful and innovative collaboration, right?

Kim Reuter [00:08:11]:

Always, always. Especially when you're like minded and U.S. Bank and DAT are coming together to share data, right? And historic and predictive data which is massively valuable to anybody who's in the industry. And I think the thing that's most impressive to me is the actual freight rate data that can be really hard to get. People are very close on that information. And then I think Ken also brought up a great point, is that 20 years ago we could not have gotten the granularity on what was going on in our transportation network that is available today. Today we can manage from the minute it pulls up to a dock door to the minute it pulls away.

Kim Reuter [00:08:50]:

And that used to be guessing games. So we have a lot more information out there.

Scott W. Luton [00:08:55]:

Excellent point. And granularity, that is a great word SAT word there, Ken. Well said. All right folks, y'all know how this works. We're going to be walking you through six key takeaways in just a second. But you know, context again is really important. And Ken, I want to keep following up with you here. If you would tell us briefly about yourself, your background and what DAT Freight & Analytics does.

Ken Adamo [00:09:17]:

Sure. So I've been at DAT for a little over five years. I've been in the industry for about 12ish, I guess years now. I graduated with a business and economics degree during the depths of the great financial crisis, which is a bad time to possess one of those degrees. So I got into deregulated energy just because that was the biggest business in the backyard of where I went to school. Really cool analytics space. But then after three or four years, jumped into freight at FedEx and absolutely fell in love with it. Thought it would be really boring, like stuff on a truck.

Ken Adamo [00:09:49]:

But I guess we all know that's not the case. So I spent most of my time in the pricing side of logistics, pricing analytics, demand planning, all of that fun stuff. FedEx. I was using the DAT data to run pricing models, staffing models, predictive demand models and all that fun stuff. As it happens, I spoke at a DAT event and they poached me to come over. Like I said, about five years ago. Okay, in simple, we're the largest freight marketplace in North America. Millions of trucks, millions of loads.

Ken Adamo [00:10:17]:

That's a cool part. I get to watch that from a distance. My side of the house really is the analytics piece. We've been able to grow that 5x since I joined, which is a great lesson in correlation and not causality because I don't think I had much to do with that. It was just kind of a coincidence that I joined in the business group 5X. But it's awesome. We serve shippers, brokers and carriers and occasionally get into some financial services, things like that.

Scott W. Luton [00:10:38]:

Oh, I love it. And you know, as you said that last data joke, how's the phrase go? Correlation does not always mean causation. Am I getting that roughly right, Ken?

Ken Adamo [00:10:49]:

Yeah, it's like, you know, the number of the years where Nicholas Cage releases a movie tends to be really peak years for people dying of strangulation with their bed sheets. And I don't think maybe they are related. Maybe Nick Cage is moonlighting as a serial killer. But I think that's truly one of those spurious correlations, if you will.

Scott W. Luton [00:11:08]:

Oh man, we just lost Nicholas Cage as a supply chain. Now viewer. Hey, Nick, we love you. Come on back. All right, so Bobby, you've shared this, an answer to this next question lots of times. If you would share briefly what the U.S. Bank freight payment Index is, what it analyzes and how it works.

Bobby Holland [00:11:26]:

The Freight Payment Index is our U.S. Bank's perspective on the freight marketplace. We are a leading freight audit and payment provider. And as you stated earlier, $43 billion in payments processed last year and the year before. So we take that data. We want to add value to our customers using that data. So one of the ways that we do this is with the Freight Payment Index. We it's a chain based quarterly chain based index measures truckload and less than truckload trending. And again, I think as you also stated previously, very well, it's one of the data points in the marketplace for our business customers.

Bobby Holland [00:12:06]:

We're not saying that we're the only one because obviously there are some fine indexes out there and we are part of that picture. Our regional perspective provides another aspect that you don't see in other indexes. And so looking at all of them, we believe that we can inform customers business decisions.

Scott W. Luton [00:12:25]:

Yep, undoubtedly. You know, Kim, I'm gonna circle back to Ken in just a second. But Kim, I mean, our appreciative conversation is a perfect example of that. You digest the data like you always do. Came in and had two or three questions based on what the data was seeing, based on. On your experiences out in the marketplace. And that is. That's very valuable interchange there, right, Kim?

Kim Reuter [00:12:45]:

Yeah. So the thing that always impresses me the most about this data is that it's so easy to digest. They've already done the work. They've already crystallized it for you. It's super easy to read and apply it to your business and help you make better predictions. That's the thing that I like the most about what the U.S. Bank puts out. A lot of other stuff I see out there, it's just a lot of words, but they really do a good job crystallizing it for you.

Scott W. Luton [00:13:09]:

Yep, I'm with you. I agree. All the rest of the stuff out, A lot of the stuff out. There's like a really bad Nicholas Cage movie. You're still trying to guess the plot, right?

Kim Reuter [00:13:17]:

Terribleness.

Scott W. Luton [00:13:18]:

That's right. Hey, kid, that's gonna be. That's gonna be the gift that keeps on giving. But Ken, same similar question to you. You know, how do you. And how do you see other industry leaders utilizing resources like U.S. Bank Freight Payment Index?

Ken Adamo [00:13:33]:

I think the. The time of running your supply chain or your logistics operation by gut feel is long over. I think the ELD Trump tax cuts in the 1718 timeframe and then you had a double whammy of the COVID disruption, kind of put that to bed once and for all. So I think if you're not intelligently running your supply chain with a multitude of different sources and signals and looking ahead, I think you're going to be at a major competitive disadvantage compared to those who don't and not a lot of people. I think what has changed the most over the last, let's say two cycles, so let's say four to six years, is people viewing supply chains as a competitive advantage or in some negative scenarios, a competitive disadvantage. If you're not on top of things, right? Not having things on the shelf, not having the SKUs that you need or being able to source the product to make the goods has just been something that's not been a foregone conclusion through the last two cycles.

Ken Adamo [00:14:28]:

So I, I really think the average. If you could measure, which you can't. I wish you could. If we all had like a little meter above our head, which was like showed our supply chain iq, I would like to believe that that number has forcibly increased over the last four to six years.

Scott W. Luton [00:14:42]:

I love that visual. And Kim, kind of one of the main points he made there is ignore the data and listen to your gut more and more at your own peril these days. Kim, huh?

Kim Reuter [00:14:53]:

So as the queen of data, I never listen to my gut, but yeah, but it's a really good point. Supply chain, historically, I've been a supply chain for many decades and it used to be a little bit of an art, right? It was kind of a. You're really good at it because you had a specific skill set that you were probably born with and it was kind of an art. But it is definitely become more and more of a science. We're using more and more data. And I unfortunately do bump into people out in the market, companies out in the market who are still doing that gut check kind of feel about their supply chain lack of visibility, you know. Oh, tell me about your process. We have Excel spreadsheet and we can't.

Kim Reuter [00:15:30]:

You cannot scale that way. And also to Ken's point, people understand supply chain now. They get it.

Scott W. Luton [00:15:36]:

That's right. That is right. And they should, they should. Non supply chain business leaders and, and professionals. They're better off by under having a fundamental understanding of how supply chain management works. I was talking with Dr. Yossi Sheffy about that not too long ago in a recent episode. All right, Kim, Bobby and Ken, we got a lot more to get into.

Scott W. Luton [00:15:56]:

We're going to get into key takeaways. Let's get through some of the key takeaways from a national perspective. There's two main ones here, Bobby, that I think we want to dive into. Tell us more.

Bobby Holland [00:16:07]:

Well, we've got a couple of themes. Operating nationally, one of the largest ones is sluggish manufacturing across much of the nation that caused a decline of 4.7% quarterly and 15% 15, almost 16% year over year in the national shipments index. And it's the 10th consecutive quarter with drops in both metrics. As you've seen from previous issues of the Freight Payment Index and other market information intelligence. We were toying with the idea of a freight recession never went as far as to use those words, but I think the numbers bear it out. And the other theme is that there are, however, some slight increases in spend, meaning that it perhaps got in some places, some areas of the country, a little more expensive at the time to move freight. So and that's another important reason why we include the rates data because now you can visually see some of the impacts that we're talking about.

Scott W. Luton [00:17:07]:

Yep. Bobby, great starting point. Kim, I'll come to you your takeaway nationally on Bobby's two points there.

Kim Reuter [00:17:13]:

Yeah. So to his point, we're seeing consistent sluggishness. A lot of this is being driven by sluggishness and new housing market and also manufacturing in the United States. I would say that we were starting to see the beginning of a recession and it's showing up in this freight index. I think that's always kind of one of the first places we see it, which is why this is such valuable data because it is an early indicator of what may be happening in the market. And to me, I am starting to see the impacts of our economy slowing.

Scott W. Luton [00:17:42]:

Yep, I'm with you there. And we're going to get Ken back in just a second and get his take nationally. But you know, both of y'all, Bobby and Kim, as you mentioned, and just to kind of recap, soft on the housing starts, sluggish, sluggish for months when it comes to manufacturing, although we're starting to see a few signs, they're really late in last year that we might be we might get some growth this year and we're seeing some other some capacity reductions. And thankfully as well, diesel fuel prices have dropped a good bit as well. Let's see, 15.5 cents per gallon on average in fourth quarter, that's about 4.2. So lots of different national things of note there, Ken, when you think of nationally, what we're seeing there in the fourth quarter, 2024 U.S. Bank Freight Payment Index and the freight market here domestically, your thoughts?

Ken Adamo [00:18:39]:

I mean, I think fourth quarter wasn't as bad as it maybe seemed on paper. I think it was probably the best peak that we've had in, I don't know, two and a half, three years. When you look at there's like two big peaks in the freight calendar every year. You got the spring and the fall peak. I think it behaved the most normally. I think maybe some folks were expecting with tariff pull forwards and all of the things that we heard in the news that it for it to be a little bit better From a volumetric standpoint, which, which it wasn't. You know, we mentioned the fuel prices coming down, but I think what most folks are looking for is this systemic recovery to start. And I don't know that we can feel too warm and fuzzy about that.

Ken Adamo [00:19:14]:

I think what we can say for certain is that we're at equilibrium. Supply and demand are somewhat at that magic middle where things like peak, things like road check week, things like port disruptions or weather will spike the market and it'll slowly or in some cases rapidly go back to where it was. That's all telltale signs of being in equilibrium. So that's really how we suss out the market.

Scott W. Luton [00:19:36]:

Love it. The magic middle. The magic middle, folks. Kim, Bobby and Ken, good stuff. Nationally, we're going to move from national to the 11 state Western region. And Bobby, key takeaway from, from the western region there.

Bobby Holland [00:19:51]:

Well, the key takeaway from the western region was that despite robust port activity, weak agriculture and weak retail actually impacted it to the point where there was a 2.1% drop in quarterly shipment volumes. And that was the first quarter over quarter decline in three quarters. You know, normally the port activity is gangbusters, but in this quarter of the or in this issue of the index, we kind of explained how even though it's coming in because depending on the type of freight, you know, it either engages a lot of freight act, truck freight activity, or it may not. And in this particular case we're saying it probably didn't as much.

Scott W. Luton [00:20:33]:

So Ken, let's come to you next. The wild wild west. Your thoughts of what you saw in fourth quarter.

Ken Adamo [00:20:40]:

It's hard, I think to like broadly summarize, I mean, because so much of that, so much of what we see in the fourth quarter is dominated by your seasonal peak trends. Seasonality is very hard, I find, to iron out of the fourth quarter's results. The freight calendar is surprisingly predictable in a lot of different ways. Where the fourth quarter, a lot of the small pack and parcel and things like that really dominate that. And that's when they're busy and they put in travel restrictions. I couldn't even requisition pencils when I was at FedEx in the fourth quarter because of peak. But then we get into Q1, there's just a different rhythm. Q1 is when a lot of large asset based carriers are doing like a bunch of turnover of equipment and repairs and yard work and all of that kind of stuff.

Ken Adamo [00:21:24]:

So it's hard to parse out seasonality from systemic changes in the market. In a quarter like the fourth quarter, I think you really start to see things late in Q1, early in Q2, Q3, kind of tell the tale of where we are in the long term market cycle.

Scott W. Luton [00:21:37]:

Excellent points there. And folks though, if you're requisitioning truckloads of pencils, don't try it in fourth quarter. One things can share there. Hey Kim, your thoughts on whether what Bobby shared, Ken shared or what you saw in the data or the markets in fourth quarter in the West.

Kim Reuter [00:21:52]:

Yeah. So when we look at the west, you know, we always think that the west is going to be busy because of Long beach and la, Right, because so much freight moves in and out of California. But we also have to remember there's a lot of retail and a lot of housing that's happening in the west and I think that's what we're seeing. Again, we mentioned the softening new housing market and I think that's where we're starting to see, as we mentioned before, the slight recession and it's really kind of amplified on the west coast because that is where there's always a lot of building and a lot of retail happening just out of population density if nothing else.

Scott W. Luton [00:22:22]:

Yep, good stuff there, Kim, other big factors you mentioned. I want to go back to what one of the things that Bobby shared and you'll find this folks in the Freight Payment Index, the weakness in agriculture, right? Many are projecting a tough year for farmers nationally in 2025 for the third year in a row and mainly due to lower prices in crop, even though production expenses are expected to decline. So we'll see how that plays out in the west and across the country here in 2025. Okay, let's see. Bobby, we're going to move from the west to the Southwest, I believe, and this is a four state region. Tell us your key takeaway in the Southwest region, Bobby.

Bobby Holland [00:23:01]:

Well, we saw that quarterly and yearly shipment volumes were in this, in this region were down, but the declines were a lot less dramatic than how it's been in the previous couple of quarters. So again, some of these things could be signals that things are, you know, either bottoming out, starting to rise again. Those are some of the things that we'll be watching for. But it definitely is an interesting look to see that, you know, at least the decline is slowing. So we may be nearing. We don't know.

Scott W. Luton [00:23:30]:

Yep, that's right. Ken, your thoughts on the Southwest, what we saw, what you expect, you name it.

Ken Adamo [00:23:36]:

I think Bobby nailed it. I think the Southwest, the market as defined here is going to be a market that everyone's paying attention to with the North American tariff conversation in Mexico cross border in this quarter and beyond. So we didn't see a ton and there's some pull forward there was to close out the year, there was a flurry of cross border activity that we saw on those high impact border crossings in Texas. And again, I expect that to continue as people. Most of the shippers we've talked to in the last week are basically tooth and nail everything they can do to get freight pulled ahead. There's basically that 30 day window that the administration has put in place to resolve the tariff issue.

Scott W. Luton [00:24:12]:

Yep, yep. And we'll see how that plays out over the next month or so. Kim, Southwest, your thoughts? Your key takeaway here.

Kim Reuter [00:24:21]:

So kind of interesting, I think maybe what I see when I look at the Southwest is that we had a huge spike in Q1 and then a big dip in Q2. And to me it looks like we're normalizing a little bit versus actually growing.

Scott W. Luton [00:24:33]:

That's a good point there. I like going back to what Ken was talking about and how getting past the fourth quarter with what happens in first quarter, there may be stronger assumptions, stronger determinations that that folks can make. All right, so Bobby, we're going to go from the Southwest to the Midwest, one of my favorite parts of the country for sure. And let's see the Midwest made up of 12 states. Give us your key takeaway here.

Bobby Holland [00:25:02]:

The key takeaway in the Midwest is inventory. Bloated automotive inventories and coupled with the soft factory output basically led to year over year and quarterly declines in shipments. And this is reflected in a huge drop of 24% year over year. And it was the second largest of the five regions.

Scott W. Luton [00:25:22]:

Second largest of the five regions. Ken, when it comes to the Midwest, your thoughts?

Ken Adamo [00:25:28]:

I agree. Everything Bobby said, you know, when we get into the first and second quarter this year looking ahead a bit, that's when we're really going to see the impact a lot of the Canadian cross border that happens through those highly trafficked border crossings is freight coming into the Midwest region, the export volumes a lot coming out of there going north. So I think that's going to be a key market to watch as you're kind of formulating your tariff strategy and how you see this impacting your business is what is really happening there. I think we're going to get a little false positive of the first half of January in the Midwest. There was a pretty big spike in volumes around Protect from freeze and some spillover into the spot market. Given the extreme cold temps and polar vortex type weather we've had, that'll iron. It has ironed out. It's slowed down considerably into February.

Ken Adamo [00:26:12]:

So I think really dialing in what your tariff response strategy is going to be is key.

Scott W. Luton [00:26:19]:

And it's important to have one, right? Right. It's important to have one. I love you mentioned the polar vortex, you know, with it being already 70 in the first week of February, which has gotten to be really common here in Georgia. I was enjoying the snow I could have done without. I was enjoying those brisk temperatures. Kim, just a few weeks back. But Kim, Midwest.

Scott W. Luton [00:26:40]:

Yeah, your your thought.

Kim Reuter [00:26:42]:

So I think it's mostly driven by manufacturing. I don't know if you've driven by a car lot recently, but it is about jam-packed as I have seen one in about six years. And we're even down to actually putting prices on cars again, which I haven't seen in a long time. You used to have to guess. So we have definitely seen a decline in consumption which automatically goes back to a decline in manufacturing. And in the Midwest, a lot of what we're not buying anymore is produced out of the Midwest.

Scott W. Luton [00:27:11]:

Good stuff there. And we're going to talk about automotive in just a second. That's a great call out there. Speaking of the Midwest, housing starts. You know, we talk about housing starts all the time. It's a critical metric that drives so much industry, right? Always a factor, of course, in our data here.

Scott W. Luton [00:27:25]:

Each quarter the Midwest was slightly below the national average for housing starts overall when, you know, compared to national rates in 2024. But further upstream, right? Housing permits were up 3.5% over the national average in the Midwest. So we'll see. That might bode some good things to come in the next couple of quarters. All right, so Bobby, we are moving from the Midwest to and this was tough to count here. This was a 12 state northeast region.

Scott W. Luton [00:27:58]:

Some of the states get really tiny. So Bobby, tell us your key takeaway here.

Bobby Holland [00:28:03]:

Well, the Northeast is very population dense. Even though it's the smallest size region, it plays like a big one. So what we saw in the Northwest region was basically a very slight increase in spending, but it was a large considering, you know, the condition of the rest of the indexes. And we also saw that the yearly declines in shipments and spin were the largest of all five regions. Again, very heavy retail oriented. You know, one of the things we put in the index was that the freight levels in this region may be close to a bottom because again, the declines are moderating. So there's a lot of reasons why, you know, we're getting these mixed messages, if you will, from the Northeast region.

Scott W. Luton [00:28:46]:

Yep. It just wouldn't be fair if all the data across the entire domestic freight market and economic and national economy would agree, right? That would make life too easy probably. But Bobby, good stuff there. Ken, in the Northeast, your thoughts of what we've seen.

Ken Adamo [00:29:03]:

I don't have a ton to add. I think the retail piece is driving a considerable amount there. It's been kind of a wild weather. Q4 was kind of wild from a weather perspective too, in the Northeast. So I think that's something to be mindful of. I still think there was some lingering I got to put myself, I mean, Q3, Q4 of last year feels like 10 years ago at this point.

Scott W. Luton [00:29:22]:

Right.

Ken Adamo [00:29:23]:

There's still, I think, some lingering effects from shifting port volumes from some of the Baltimore stuff that wasn't, I think, fully resolved by that point. So it's just something to think about that I think just some shifting here and there, but I think overly dominated, especially with the E commerce shift to some of that retail things. You know, regions like Harrisburg, that north central Pennsylvania corridor is just so retail dominant now.

Scott W. Luton [00:29:43]:

Good stuff, Ken. And you lied. You did have more to add to Bobby's perspective. I knew you did, Ken. I knew you did. They're just words. Quite a one two punch between Bobby Holland and Ken Adamo and of course, Kim Reuter coming over the top. Kim, your thoughts on what we've seen up there in the Northeast.

Kim Reuter [00:30:01]:

So I agree with what Ken had to say. You know, the Northeast, we see less volatility in these particular in freight in that area because it's not so reliant on AG or manufacturing like we're seeing in other regions. And we also do have much more densely populated and a lot more retail that happens up there. The people are working on finance industries, working in other industries that are not as hit so drastically with the economic shifts up and down. They're a little bit more insulated. So I think this is kind of typical of what we see in the Northeast.

Scott W. Luton [00:30:32]:

Yep. Good stuff, Kim. We've touched on manufacturing probably on every single region like we share on every single show. It's a May, of course, goes without saying, major sector impacts about everything else across the economy, certainly supply chain. And it's been sluggish, as we know, for months, right? We've heard, we've talked here on just about every show, Kim, on the from the buzz to these quarterly sessions here on this malaise. We've all been waiting for it to finally find its gear, right? So. And some analysts are seeing some bright spots that might project future growth. It's not an overwhelming amount of optimism, I should couch it like that. But some see demand increasing along new order rates increasing. So we shall see. I think most analysts I've read showed in December that the rate of contraction was slowing. And hey, if we're not gonna get growth, I'll take a lessening rate of contraction, as weird as that sounds.

Scott W. Luton [00:31:30]:

Bobby, what's that said? Softer landing, Softer landing. Softer landing. All right, let's see here. We are going to the Southeast, folks. The Southeast. And Bobby, key takeaway from my home region here, at least, what's going on Southeast?

Bobby Holland [00:31:46]:

Well, the Southeast is still, you know, digging out, so to speak, from the hurricane damage, you know, and basically last Q3 and Q4, with all the businesses being damaged, all the infrastructure being damaged, we see the largest declines and quarterly declines in shipment and spend in Q4. But as you mentioned earlier with respect to perhaps California and the devastation they have going on there, eventually they will rebuild, and that's when we'll start to see things pick up. So it's one of the things we'll be watching for.

Scott W. Luton [00:32:19]:

Well said, Bobby. Well, well said. And we're all, you know, from the hurricanes in the Southeast to the fires out in the west, we are all praying and hoping for a fast, as fast as possible rebuild for man. It's just been a devastating stretch here. Ken, the Southeast region, a couple of your takeaways from fourth quarter 2024, probably.

Ken Adamo [00:32:41]:

The region I've had the least amount of interaction with, which is probably a good thing, to be quite honest. The one thing we really tend to look at in Q4 in the southeast region is that Savannah into Atlanta and then inland traffic. And that seemed to pan out pretty much as you would generally expect. Maybe some of that Jaxport traffic as well, but not as much. So kind of a song remains the same. A little Led Zeppelin reference there.

Scott W. Luton [00:33:07]:

Yeah, love it. The song remained. I think I hear that song about three times a day on the radio. The song remains the same. Ken, Bobby and Kim, great music reference, but you're bringing the Hollywood references here today. Ken. Love it. Kim, Southeast region.

Scott W. Luton [00:33:22]:

I'm looking here. Virginia is indeed in the 11 state southeast region. So, Kim, what are you seeing?

Kim Reuter [00:33:30]:

Well, obviously we had a lot of Mother Nature was not kind to us in Q4. 2024. Hurricane season is always an adventure in the Southeast and then we have to remember we also had the situation in Baltimore where we shut down the port of Baltimore for I can't remember how long it was. But all of that freight shifted, shifted both north and south, but most of it did shift up to New York and Pennsylvania to carry that freight. So that was a big impact. And then I think also obviously the hurricanes that we're seeing, the natural weather, Florida was devastated, North Carolina, South Carolina, Georgia got hit very hard. So it was a multi state effect.

Scott W. Luton [00:34:06]:

Yep, excellent comments there in the Southeast. All right, I've got a question for you Ken. So many out there regard DAT Freight & Analytics as the go to. How about that for that's gotta be make your make your day the go to information source for enterprise shippers, especially when it comes to freight data, which is something that looks like James is asking about. So as we start to come down the home stretch, we want to lean into your superpowers here Ken, and find out how your crystal ball is working. What might we see in the freight market in the months ahead? Ken.

Ken Adamo [00:34:42]:

Like I said earlier, I think we were pretty solidly at that equilibrium point. This is the longest I've seen rates generally stuck at year over year flat in a while. And we're three, four, five months in as we keep counting of year over year flat rates. You know they're up a little bit 3 to 4%, but that's not really a ton. That's kind of base inflation if you want to view it like that. So I think we'll pick up traction once we get through the doldrums of winter, which always happen in freight. And if we're able to have a modest the California produce seasons, I think we talked about this a little bit, have been pretty dismal the past few years. We've had landslides, we've had rains, we've had drought, we've had kind of the whole.

Ken Adamo [00:35:19]:

It's been quite biblical. So I think like as we pick up steam getting into the spring, people are buying patio furniture and grills. If we can see some relief on interest rates. The watch out here though. We talked about housing starts and didn't go too deep, but a lot of those two by fours and two by six has come from Canada. So the lumber industry is a big watch out if you're you know, hoping that the Fed lowers interest rates and that spurs home building and remodeling projects. You've also got to keep in mind that a lot of timber framing and construction lumber come from up north. So that's I think kind of how it, how it's going to play out over the next six or so months.

Scott W. Luton [00:35:54]:

All right, Kim, same question. Bobby, as we know, folks that have tuned in the series know that Bobby cannot break out his crystal ball here, but I bet it's really reliable. So we can't ask Bobby what he sees in the future. But Kim, on the heels of what Ken shared, what do you see over the next few months in the freight market?

Kim Reuter [00:36:09]:

Well, there's a lot of anxiety in supply chain right now, especially around the tariffs and what's really going to happen. Everyone breathed a sigh of relief when we got some calmness around Mexico and Canada, but we still have a lot of questions going on of what's going to actually happen with China and what that really means. So there's a lot of, there's a lot of shipping anxiety is what I would call out there. I think we are seeing a slowing in the housing market. We have not gotten any relief from inflation for a while. Interest rates remain high. I think we're going to continue to see a slowdown.

Scott W. Luton [00:36:38]:

Yeah. You know, I hope you're wrong and I bet you hope you're wrong. But the front part of your response, that uncertainty, goodness gracious, we got it by the container load right now, I think everybody.

Kim Reuter [00:36:47]:

And we're paying tax reform. So.

Scott W. Luton [00:36:49]:

Yeah, that's. That's right. I want to add one more note, Ken, Bobby and Kim, automotive industry came up and we were talking about this on the, on the buzz earlier this week. A couple of trends here that has been reported on not across the board, but pockets. So Kim, I loved how you talked about the finally because I'm seeing it here in Georgia, too. Finally we got vehicles on lots. I mean, that was a stark image to the pandemic when, right?

Scott W. Luton [00:37:15]:

You saw no vehicles, right? But some automakers have been intentionally keeping inventories low, helping cash flow. And secondly, although, you know, folks have been ordering cars for quite some time, some automakers are looking to lean more into that build to order versus build to stock that industry is so well known for. And one last note about the automotive industry because it's so important for all things supply chain and then some cox Automotive projects 2025 to be the best year in the U.S. auto market for sales since 2019. That, folks, is great news and will certainly have a ripple effect if it comes to fruition. Okay, Ken, Bobby and Kim, what a great conversation. I wish we had a couple more hours to dive into not just the domestic freight market but everything else.

Scott W. Luton [00:38:07]:

We're seeing. But Bobby, I want to do this as we start to wind down. Let's make sure folks know how to find the freight payment inde and subscribe to it. That's really easy, right? Right, Bobby, it's easy.

Bobby Holland [00:38:18]:

Freight.usbank.com and fill in some information and you get it free in your inbox quarterly.

Scott W. Luton [00:38:26]:

It is just that easy, folks. And I downloaded my copy, the latest one this morning. It is easy, Ken, I'll tell you. And the DAT Freight & Analytics team has been on the move. I know I probably will see it manifest next week. But for folks that don't catch you in the team at manifest, how can they track you down and collaborate and learn more from how you got your finger on the pulse of supply chain minute by minute?

Ken Adamo [00:38:53]:

Yeah, we're pretty much everywhere. We're gonna meet a bunch of the trade shows this spring, dat.com. dat.com/trendlines is a great pocket. It's the most highly trafficked URL in our entire ecosphere at dat. It gets a bunch of great information there. You can find me on LinkedIn, on Twitter. I'm somewhat active with, with kind of short, short analytical content. But yeah, like I said, my team will be out blanketing the market this spring at all the different trade shows.

Ken Adamo [00:39:21]:

So stop by and say hello.

Scott W. Luton [00:39:23]:

I love it, Ken. And folks, our team is going to make it easy on you. We dropped Ken's LinkedIn profile right there and little, little pro tip, it's Ken Adamo, like Alamo but minus L and insert the D. So if you want to get his name right, the remember a little tip there. But Ken, a pleasure and I really appreciate what you and the team are doing and love the collaboration. New partnership between U.S. Bank and DAT here. Kim, we have devoured good perspective and data over the last hour.

Scott W. Luton [00:39:55]:

Really have enjoyed all three of you, your perspectives and, and what you see data wise and boots on the ground out in the marketplace. If you had to pick one key takeaway from the whole discussion here today, Kim, what would that be?

Kim Reuter [00:40:07]:

I think the key takeaway is that, I mean, obviously we're down a little bit kind of nationally and that is, I believe, indicative of what we're going to see in 2025. But I would say that my key takeaway from all of this and kind of my recommendation is to use this data, use it in your negotiation with your truckers, using your negotiation with your, with your carriers or shippers, any type of customers. This is solid information that's very indicative of where we see the freight prices are going to go.

Scott W. Luton [00:40:38]:

Well said. Yeah. If you don't use the data, you know, what good is it? Cover your ears, Bobby. I didn't mean that harshly, but you know what I'm saying. It's like investing in technology platforms and the team not using it. That unfortunately goes on a lot here across global business. A lot of good stuff. Okay, folks, hope you enjoyed this conversation as much as I had today.

Scott W. Luton [00:41:20]:

And with all that said, Scott Luton, challenging all of y'all, do good, give forward, be the change that's needed. And we'll see you next time right back here at Supply Chain Now. Thanks, everybody.

Narrator [00:41:30]:

Thanks for being a part of our Supply Chain Now community. Check out all of our programming at supplychainnow.com and make sure you subscribe to Supply Chain Now anywhere you listen to podcasts and Follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time on Supply Chain Now.