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Which drives freight volume: low inventories or consumer spending?

Posted by Avery Vise on Dec 21, 2020 5:08:00 PM
The FTR Experts were posed with the question, "Which drives freight volume: low inventories or consumer spending?"

Following The 2021 Outlook, the final session of the FTR Engage virtual speaking series, the FTR Experts sat down to answer listener questions beyond what was covered during the Q&A within the presentation.

 

Key Takeaways:
  • Retail sales has a bigger impact on freight volumes in a normal economy.
  • We have to keep in mind that consumer spending includes both goods and services. 
  • You can have an increase in freight just based on sales alone without any change in inventories, but you’re not necessarily going to have much of a change in freight with some modest increase in inventories without the increase in sales.
  • Our current situation is largely unprecedented. In essentially two months we dropped more than 12 percent in inventories in retail, so I think that the level of inventories at this point is so extraordinarily low that it will lead to an increase in freight volumes.

Listen to the full discussion on the State of Freight Podcast or read the fully transcribed Q&A on the FTR Blog.

Tags: Consumer Spending, inventory, Freight

 

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