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Industrial Demand Shows Signs of Recovery, Some Trucking Companies Report

by Mich M.
02/18/2025
in Logistics & Transportation

Industrial demand, which has faced challenges during the freight recession over the past two years, has underscored the manufacturing sector’s key role in the trucking industry.

Some carriers have reported early signs of recovery in their Q4 earnings, following a period of industrial weakness that shifted their freight focus toward less profitable retail shipments. However, others are still awaiting a significant increase in manufacturing demand, even as the Institute for Supply Management’s index indicated growth in January.

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Old Dominion Freight Line reported that its industrial business outperformed retail demand in Q4, marking the first time this shift occurred in a while. This positive performance stood out despite a 21% decline in operating income and drops in shipment volumes, weight per shipment, and tonnage per day. The company noted that revenue from industrial customers was slightly better than overall company performance, although caution was expressed about declaring an industrial rebound too early, citing a typical lag in growth.

XPO, which derives two-thirds of its business from industrial accounts, reported improved customer sentiment. A survey conducted by the company showed a 10-point increase in the percentage of customers expecting demand to accelerate in 2025, compared to a previous survey three months earlier. While there was optimism about demand improvement, XPO acknowledged that the macroeconomic environment remains uncertain, and it is too early to declare a full recovery in the manufacturing sector.

ArcBest’s ABF Freight has experienced continued weak industrial demand, which negatively impacted its daily tonnage, shipments, and weight per shipment in Q4. However, the company anticipates an eventual pickup in the industrial economy, despite challenges such as snowstorms and economic uncertainties that cloud its near-term outlook.

Saia, on the other hand, has not yet observed a notable increase in manufacturing demand. While the company has seen a positive trend in weight per shipment, it attributed this to internal efforts rather than a broader economic or industrial recovery. Saia remains positioned to benefit from an industrial rebound whenever it occurs, supported by investments made in 2024.

Overall, while some trucking companies are beginning to see signs of recovery in industrial demand, others are taking a cautious approach, waiting to see if the upward trend continues throughout the year.

Find the best supply chain logistics news at The Supply Chain Report. Free international trade tools are available at ADAMftd.com.

#IndustrialRecovery #TruckingIndustry #LogisticsUpdate #FreightDemand #ManufacturingTrends

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