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- [00:00]
A
Everybody continues to say the outlook is positive in the future.
- [00:04]
B
Right.
- [00:04]
A
We gotta be optimistic. I do believe we're in the ninth inning of the freight recession, not booming. But I don't think it's going to be this free fall. I think capacity is going to continue to be a little bit challenging and I think if I was to share your advice, it's have a plan, do your RFPs early, lock in those rates and capacity.
- [00:27]
C
Welcome to Supply Chain, now the number one voice of supply Chain. Join us as we share critical news, key insights and real supply chain leadership from across the globe, one conversation at a time.
- [00:39]
B
Hey, good afternoon, good evening, good morning. I might have said that in reverse order, but Scott Luton and Corinne Bur with you here on Supply Chain now. Welcome, Corinne, how you doing today?
- [00:50]
D
I'm doing great. I'm just going to say good day and then I can cover all that. So it's great to be with you. And I want to add my welcome to all the supply chain movers and shakers out there that are joining us today.
- [01:01]
B
It is a great time to be in Supply chain. I thought you were going to add
- [01:04]
D
that it is, it is a great time to be in Supply chain.
- [01:07]
B
It sure is.
- [01:08]
D
You're just back from manifest so you are probably been swimming in it for 20 hours a day for the last three days.
- [01:15]
B
We've got a lot between the ears, but we got room for another terrific truckload of wonderful actionable perspective here today. Corinne. Today we continue a long running terrific series here. We're going to be sharing key insights from the latest quarterly edition of one of the leading transportation industry resources, the US Bank Freight Payment Index for Q4 2025. Now I make no secret about it. I've really, I've really enjoyed this series going back for five or six years here it poses a ton of value. We get feedback regularly, Corinne, not only as always, we dive into what the data tells us as it relates to the, to the domestic freight market. But we also marry that data driven perspective with boots on ground in market executive practitioner perspective as well. And we're going to get a really good sense of what transpired in the fourth quarter 2025. We're also going to be sharing a few nuggets that's going to help you prep for where we are now and where we're heading now. We've heard from tons and tons of supply chain teams who lean on a variety of resources like the Freight Payment Index to identify trends, plan and project, create productive conversations with suppliers or customers, different conversations you name it. So, great show coming up. All right, so Corinne, this, this is a bit mind boggling. One really important element to the Freight Payment index, all the treasure troves of data processed through U.S. bank that it really is generated by. U.S. bank processed $46 billion worth of transactions in 2025 alone. All those data driven insights and the exceptional commentary from Bob Costello, the chief economist over at the American Trucking Associations, well, that's one of the biggest reasons why U.S. bank is such a great resource for this information that business leaders leverage and act on. So Corinne, lots of golden nuggets here today, is that right?
- [03:08]
D
It is indeed. And I'm going to underscore what you just said. $46 billion in transactions. So a lot of actual commerce that is occurring in the marketplace. So really good indicator of activity, investment, trade, volume, market constraints. Can't wait to hear what Bobby shares with us today.
- [03:31]
B
I'm with you and Bobby and Nick, folks. We're going to bring on both and Corinne always brings it. So you're in for a treat here today. And I want to introduce Corinne Bursa, Bobby Holland, Director, Freight Business Analytics, U.S. bank. And our newest best friend, Nick Palmucci, Senior Director of Supply chain at Ferguson Enterprises.
- [03:51]
A
Hey.
- [03:51]
B
Hey. Bobby, you're back. Good morning, good afternoon. How you doing?
- [03:54]
E
Doing well. How are you guys doing?
- [03:56]
B
Wonderful. Great to see you again. And you always bring the best friends, industry leaders rocking and rolling out there. Nick Palmucci. Great to see you here today, my friend.
- [04:05]
A
Hello, how are you? Thanks for having me.
- [04:07]
B
Wonderful, wonderful. Well, I brought many things back with me from Manifest, including a, a cold. So that's why I'm an octave lower, folks. But nevertheless, we'd like to start with fun warm up questions around here. Nick, I'm going to start with you because you've got quite the story. Tell us about this undefeated field hockey team that your daughter is a big key part of.
- [04:28]
A
Yeah, my daughter's pretty fortunate. She is a sophomore. We live in Virginia. She's been on the varsity field hockey team for two years and she's been pretty fortunate to be on a 113 game winning streak. They have won three, five state championships in a row, 13 total as a school. So they're pretty much a powerhouse to begin with. But the seniors last year and this year have never lost a game in high school, ever. During that, that 113 game winning streak, they have scored 717 goals and gave up 26. So just 26 over 113 games. So you, you do the math. It's A pretty low output. They're pretty amazing team. And we're on to lacrosse now, but it was an intense year and hopefully number six next year.
- [05:19]
B
Nick, that is remarkable. And Corinne, I like how you brought all the data with him. Yes, and we celebrated.
- [05:25]
A
Right?
- [05:26]
B
A lot of good stuff there, Nick. All right, so Bobby, I'm gonna switch gears with you. And now, Bobby, on past shows we've talked about some of your grilling prowess and talk about some of those dishes there. And we've got St Valentine's Day around the corner a couple weeks or so from now. Is it going to be cranking up real time with your significant other or is it going to be heading out to a nice restaurant? Bobby, which is it?
- [05:48]
E
We will be spending it with my mother in law. She's a widow. We'll be having a nice dinner with her.
- [05:54]
B
That is outstanding. Outstanding. And what's her favorite dish? Bobby, what's one of the favorite, favorite dishes?
- [06:01]
E
Well, it's Italian.
- [06:03]
B
Okay, you have me there. You have me in Italian. So you have to send us some pictures, Bobby, but what a great thing to do. All right, so Corinne, same question. Are there any annual Valentine's Day traditions in the Bursa household?
- [06:17]
D
We usually like to do some kind of experience. So not necessarily going to a restaurant, but we've done things like gone hiking or some of these kind of new fun venues that are around. So whether it's doing an escape room or just something where we have to work together, spend time together and work on our relationship as a part of
- [06:38]
B
that, well, I look forward to that. And we've got to create some new traditions here in the Luton household. But folks, it's great to have Nick and Bobby and Corinne back for this installment. And so let's do this, Bobby. You know, there's so much going on in this edition of the Freight Payment Index. We got tons of insights and takeaways coming up soon. But if you had to put one sentence long theme that's going to reflect today's tenor of the conversation and the vibe, what would that be, Bobby?
- [07:10]
E
That freight market is tightening as costs rise and regional Trends diverge in Q4, 2025. We'll see last, like you said, a
- [07:18]
D
lot of stuff going on.
- [07:19]
B
Okay, I hate the cost rise part. That's my least favorite part of that whole sentence. But hey, we're going to dive into it at a national level. We're going to dive into it at the regional level. And just like you see on your screen, there's download the report, right. Follow along with us. Give us your thoughts, spill coffee on it, dog ear it. Mark it up and let us know you what your own position is on a variety of topics related to the domestic freight market here today. All right, so we're going to get into eight critical takeaways in a minute, but let's level set a little bit more on a couple of key components of our conversation. And Nick, so this is your first time with us here on supply chain. Now I know a lot of folks though are familiar with Ferguson Enterprises, right? Great company. But just tell us a little more about yourself and what the company does.
- [08:04]
A
So I'm senior director of supply chain. I've been with Ferguson for eight years. Started in distribution network, ran a DC up in upstate New York and moved to headquarters six years ago. I had quite a few different roles here, strategy roles, and now I'm in the logistics department for the last three years. So Ferguson, right. We are a water and plumbing and air for non residential and residential and North American construction markets. We provide expertise in our wide range of products and services for plumbing, H vac appliances, lighting to pvc, water and wastewater solutions. So we're headquarters here. I'm sitting here in Virginia, Newport News, Virginia, just north of Virginia Beach. Our sales are north of $30 billion in we have over 35,000 associates in over 1700 locations across the country.
- [09:00]
B
Wow, man, an army. Really big enterprise. I tell you, that's a. You're in a great position to add very unique boots on ground perspective to this conversation. Corinne, I've got a different question for you. Now that we've kind of learned more about Nick and Ferguson Enterprises. You've been a longtime supply chain leader, especially in the technology space. When you think of the value and how leaders use a freight payment index and other resources like it, what comes to your mind? Corinne?
- [09:25]
D
Well, this index is really a leading indicator of economic movement, right? Whether we're talking about raw materials that are heading into factories or finished goods that are either in distribution centers or heading from distribution centers to retail shelves or to end consumers or customers when freight moves. The economy's in motion. So this is a really good indicator of the positioning of that inventory to fulfill market demand. So I love to look at what U.S. bank brings to us every quarter because trends are important. But these are actual transactions that we're talking about. So this is not sentiment, it's not a survey, it's a fact based analysis of what's happening. So Bobby, look forward to hearing what you bring to the table every quarter. Thanks for sharing it with us same
- [10:18]
B
and facts, not feelings. That's another one of your mantras, right?
- [10:22]
D
Indeed. Yep, yep. Try to keep up when freight moves. That means the economy is in motion. So that's good news, bad news. We're going to find out for Bobby in just a minute.
- [10:32]
B
That's right. So before we get into these eight key takeaways at the national level and at the regional level, Bobby, I want to make sure for our newer audience members that may be new newer to this resource, let's make sure they know what the US Bank Freight Payment Index is, how it works and how they can get it. Tell us more, Bobby.
- [10:51]
E
Well, it's our viewpoint, U.S. bank's viewpoint of the truck freight marketplace. It's a chain based quarterly index and it's a same store sales type comparison between quarters, quarterly spend and shipment volumes. And we measure the deltas and velocity. So a reflection of the changes in the marketplace as well as augmented by freight rates. Race data, since we talk a lot about that from debt.
- [11:19]
B
Right. And my favorite part, one of my favorite parts is the region by region of you. We talk about this a lot. It really breaks down some of the common but also some nuances you're going to find and trends and goings on you're going to find across the different regions of the domestic freight market. So I think the table is successfully set. Corinne, Nick and Bobby. All right, so Bobby, we're going to start with I think three key takeaways from the Q4 2025 Freight Payment Index at the national or macro level. So Bobby, let's start there. Tell us more.
- [11:55]
E
So from a national perspective, we see nationally that industry capacity continued to shrink in Q4, driven by what we believe were carrier exits, regulatory changes and stricter driver requirements. And while we saw that shipment volumes improved slightly, we see that it was at a higher cost. Fewer drivers and smaller fleets strained capacity for national shipments and spending. We saw freight volumes rebounded from Q3 but remained well below historical norms. Shipper spending rose for the third straight quarter, outpacing volume growth as tighter capacity pushed rates higher. And then finally on the regional side, shipments and spending, we saw capacity constraints and rate increases that drove up costs across most regions, even where we saw that shipment volumes were flat or declining. The standouts this quarter were the Northeast and the Southwest for their contrasting trends, as well as the Northeast seeing robust gains in the Southwest facing steep declines. So all over the map here, literally
- [12:55]
B
all over the map, that's so easy to analyze. Things are all over the map, Nick. Thinking nationally Right. Especially given the organization with your footprint. Your thoughts what we're seeing from the domestic freight market in Q4.
- [13:09]
A
Yeah. I mean capacity is definitely tightening. Right. I think a lot of companies post Covid. Right.
- [13:16]
B
Are.
- [13:17]
A
Are learning what they want to invest in in soft volumes. Right. So how do we, how do we tighten our belts? There's but volume is starting to pick up and the lack of drivers and a lot of the regulatory changes are starting to really impact especially those pockets that Bobby just talked about. But our carriers are holding us to those committed capacities and if we need additional capacity, they're charging appropriately. And we're starting to feel it from
- [13:47]
B
that standpoint, Corinne, they're going to hold us to these commitments we're making. And the other thing he mentioned there, unfortunately we have had drivers being kind of pushed out out, at least for the time being of the driver population due to regulatory and other and other challenges out there. But your thoughts, Corinne, at a higher national macro level.
- [14:07]
D
Yeah. I think one thing actually that Nick said that's really important is being a shipper of choice becomes an advantage in the marketplace. So having a good relationship with your carriers, really important here to get that committed capacity that's available. One of the things I found interesting in the report as I reviewed some of the details was the contributing factors to constraint in the marketplace or capacity constraint in the marketplace with the Department of Transportation pausing issuance of certain non domiciled CDLs and that could impact maybe as many as 200,000 drivers. So that's an impact on overall available volume and capacity. So that could be contributing as well. So even if demand is flat but capacity is down, then you know, going back to my basic economic class, that means that pricing is going to go up. So look forward to kind of hearing about that give and take of the Northeast versus the Southwest and maybe what some of the factors are there.
- [15:07]
B
Corinth, excellent. Call out something we're going to be keeping our finger on the pulse of to see if the regulatory policies may become more flexible in the months ahead. We shall see. Corinne, Nick and Bobby, good stuff. Now I want to move down into a region by region look like we do. Right. And we're going to start Bobby out west with the western region. Some of your key takeaways there from what's taking place freight wise, economic wise from the west.
- [15:35]
A
Okay.
- [15:36]
E
Well, freight volumes dip slightly in this in the west region and this is impacted by softer port activity and cautious consumer spending. We see that reflected in the the shipment volumes being down 1.3% however, that was an improvement supported by changes in trade policy and a rebound in imports. But we see that shipper spending continue to climb and remains. But even though it remains below pandemic levels, it was still up 2.6% over last quarter.
- [16:03]
B
All right, so Nick, out west, beyond what Bobby shared your perspective, your team's perspective, may agree, may disagree, maybe somewhere in the middle. What you see out west about Nick?
- [16:14]
A
Yeah, I mean, for the last couple years, Southern California has been a challenge, right. And with this tariff activity, it did get better, but it feels a little bit better and capacity is a little bit better. But where we're very challenged right now is the Northwest. That seems to be very challenging for us and we're trying to pinpoint kind of the opportunities there. But spot market capacity, we're finding that we have to get creative and think more final mile than truckload and kind of leverage different, you know, carriers or kind of think outside of the box of late and especially in the fourth quarter.
- [16:50]
B
Yeah, good stuff there, Nick. I just spent a little bit of time up in the beautiful Pacific Northwest and fortunately I did not have to. I was not tasked with any freight challenges like the team there, Nick. It was easy in and out and great food, no freight. Corinne, the west, your thoughts?
- [17:08]
D
Yeah, it's good to hear that some of that volume is coming back now in the west. I do think the western region was, was impacted potentially as a result of the tariff actions and uncertainty. I think in the quarters prior to fourth quarter, we saw some front loading or some companies actually bringing in inventory ahead of time and stockpiling that earlier in the year, just with so much uncertainty on what the actual impact of the tariff actions were going to be.
- [17:37]
B
Yeah, that's right. Karen and Nick, lots of good stuff there. And Bobby, appreciate your data driven perspective on the front end and that's where I want to pick up on Two quick thoughts for move on to the next region because one of my favorite parts about the report is you're going to see like data like hit this right here. This is focused on the west region and you look where the spend and the shipping volume has been the last couple of years. Right. And you can check that out both at the national level and at each regional level. So that's number one. And we'll show this for each of the regions here too. But one thing that certainly impacts domestic freight, freight everywhere for that matter, is retail activity. And it's really interesting to see a couple different takes on retail activity for fourth quarter 2025. This first one is from our friends at National Retail Federation. They saw a rosier picture, I think, than some saying that, quote, 2025 holiday sales from November 1st through December 31st grew 4.1%. That compares with NRF's forecast that holiday sales would increase between 3.7 and 4.2 from the same period in 2024. So that came in just below the top end of their prediction. Right. However, you switch over to this report from cnbc. It pointed out that the December retail sales disappointed many as retail sales were flat in the month and many economists surveyed were expecting increase just in December of 0.4%. Now, some of the sectors showing declines in December. Furniture plays a role role in freight. Right. Clothing, accessories, electronics plays a role in freight, while building garden centers saw some of the strongest gains. And Bobby, I want to start with you. What were your key takeaways from the Southwest? Bobby?
- [19:26]
E
Well, the Southwest saw a brief recovery in shipments after a sharp Q3 drop. We see this is reflected by the fact that shipments are up 5.4%. It says volumes ended the year far below 2024 levels overall. But we see that they're up over the previous quarter now. Tightened capacity again, as we mentioned, driven by regulatory changes and labor challenges. It pushed costs up sharply. And we see that in the Southwest. That was reflected in the spend index, the regional spend index up being 12.6%.
- [20:00]
B
All right, Nick, moving down from the west to the Southwest, what'd you and your team see?
- [20:05]
A
You know, the Southwest has been pretty quiet. Capacity is there. Rates are honestly pretty solid because there is capacity. What we're finding is kind of to your retail points, they're very soft on the residential. But where those large projects, data centers, all of that are keeping kind of the market afloat there. But we anticipated with a lot of the regulatory issues there to be some challenges. We're just not seeing them right now. So it's kind of the status quo. And that Southwest, which is was not what we anticipated.
- [20:45]
B
You know, Corinne, I love the, I mean, what we just heard there from Bobby and Nick is why it's so important to bring the data in and then bring the out the market perspective in. But Corinne, how about you from the south Southwest, what did you see there?
- [20:58]
D
Yeah, I think one of the biggest things that stood out to me was one of the last things Bobby said, which the Southwest, I believe its overall annual shipment volumes were down significantly over 30%, maybe 31.5%, 31.6%. But that's significant for the full year of 2020. 5. So even though we saw some recovery in fourth quarter on an annualized basis, certainly was lower, which I think is contributing to Nick's perspective of they can get the capacity they need so their business demand is consistent and they've got good access to the capacity to fulfill their orders or bring their inventory in.
- [21:39]
B
Yes, excellent points, Corinne. And folks, we're looking at the Southwest, the two year movements there, both on the shipping and the spin. Again, you'll find this in the freight Payment Index, which by the way, folks, is free to download. And now we're going to move from the Southwest to the Midwest. All these are critical regions. Of course, the Midwest plays a major role, especially manufacturing and other places. All right, so Bobby, what'd you see there in the Midwest?
- [22:05]
E
Well, in the Midwest, we saw improvement in shipments in the fourth quarter, supported by modest gains in manufacturing and construction. However, inbound freight from Canada and overall consumer demand remained subdued, which kept annual volumes below last year we saw shipper spending going up, reflecting modest rate increases. And this was reflected in a rise of shipment volumes at 3.5%, but spending was up 5%. So outpacing the showing, it was cost more to ship slightly more.
- [22:36]
A
Yeah.
- [22:37]
B
So, Nick, in the Midwest, what'd you see?
- [22:40]
A
So we get a lot of carriers reaching out to fill capacity kind of in the Midwest right now. And when I ask why, I get a lot of answers around a soft automotive kind of from a perspective there. And they have capacity that they're trying to fill. We do depend on a lot of regionals in that area that, you know, they've been kind of growing and building out. But there's capacity in the Midwest and we do feel it.
- [23:06]
B
Yep. All right, Corinne, the Midwest, what'd you see?
- [23:10]
D
I love that color commentary. I mean, that's really interesting, Nick. Kind of tying together just demand for your business versus demand for other businesses in the region. That offers some important insights because I think we all recognize the automotive sector has, you know, has had significant pressure on it as well. And it follows both kind of a durable goods as well as a retail impact in the business as well as interest rates, which I know you know, impacts your business, Nick, as well, housing starts and all that kind of stuff. So interesting to hear just what you're experiencing in the Midwest.
- [23:45]
B
Yeah. You know, there was a call out in the Midwest region, Corinne, Nick and Bobby, about slightly decreased imports from Canada. Right. And the role that was playing one of the many factors. And I wanted to share something in turn going kind of on a related note, something going in the other direction, and that is exports from the US Going into Canada. The National Taxpayers Union pointed this out here. Monthly exports of U.S. goods to Canada have dropped a good bit from March 2025 to November 2025. Of course, tariffs played a big role there. They're reporting a drop of over 20% in that time frame. And Corinne, I don't have it right in front of me here today, but I know that adult beverages, you know, the bourbon and whiskey industry in particular has been hit hard with this move here in Canada. Right. And elsewhere. Is that right?
- [24:35]
D
That's a fact. But also the. The automotive sector, as Nick was saying, is a big part of that trade. That's occurring there, too.
- [24:44]
B
That's right. Okay, so we're going to move right along to the Northeast region. The Northeast region. Bobby, I always look forward to hearing what you've got to share when it comes to what's going on Northeast. Your thoughts?
- [24:59]
E
Well, the Northeast was the smallest region, but it, as we've always commented, it punches way above its size. It led the nation with the consecutive quarterly and annual increases. Shipments are up 4.2%. Spend was up 5.5%. This is LED by or helped by manufacturing growth and resilient consumer activity. Big retail up here, especially among higher income households. This is what helped drive gains despite pockets of weakness in Pennsylvania and New Jersey.
- [25:29]
B
All right, so, Nick, the Northeast, what'd you see?
- [25:33]
A
We're seeing similar. It's high activity. It's a strong market right now, and we're getting charged for it. So there is a lot of questions about rates and looking in there. And it's very different than the rest of the country for carriers because we're seeing high activity from a sales perspective. And to support that, there's quite a bit. But if you're creative and you look at it, you can also leverage it because there's a lot of lanes that you can fill some of your capacity with where you can't do in other areas.
- [26:01]
B
Yeah, well said, Nick. It is an interesting region that does punch above its weight, as Bobby said. A good old boxing analogy there, Corinne, the Northeast, what'd you see?
- [26:11]
D
Pretty much the same thing that Bobby and Nick have shared here. You know, you're excited that you're seeing an increase in volume because that seems like a good indicator of economic activity. But then on the flip side, it costs more, which puts pressure on margins overall for the businesses that are actually the shippers of these goods. So it appears to be one of the bright spots from overall volume. But at the same time, we are continuing to see higher costs that are coming from either less available capacity or other increases in costs. Despite things like some of the fuel costs have come down just a tiny bit in the market, but not enough to bring costs down overall.
- [26:50]
B
Yes. And Corinne, I'm going to pick up where you left. You mentioned a couple of times those cost increases. I want to share. You know, we track the manufacturing industry as one of my favorite entries of all time regularly. It plays a critical role in all things freight. And check this out. This comes from our friends over at Reuters. We all know the role that manufacturing activity plays. Big factor when it comes to the freight market according to at least one data source, the ISM Manufacturing pmi. And it's really important folks, don't go to just one single source for data. Take a very portfolio type view, right. It showed manufacturing contracting again for a 10th straight month. In fact, its primary measure of manufacturing activity showed that it was its lowest month since October 2024. Yikes. But as you can see on this chart, I wish I had good news here. See on this chart here from our friends or orders, the one thing that continues to be up, and this is where I go back to your analogy. Your, your comments there, Corinne. Input costs for manufacturers, really across the country. So we may have lost Bobby just for a second. Sometimes the camera just goes out. That happens.
- [27:59]
A
Sometimes it looks like the camera's out.
- [28:00]
E
Can you guys hear me?
- [28:01]
B
We can. We gotcha. Hey, one out of two ain't bad. We'll take it. So. So Bobby, let's talk about the Southeast. Me and Corinne's neck of the woods. Actually, Nick, you being in Virginia, you're in our neck of the woods too. So Southeast wise, what'd you see there, Bobby?
- [28:16]
E
Well, in the Southeast we saw that freight volumes declined for the second straight quarter. And this was affected by reduced consumer confidence, tariff uncertainty and cautious spending. Among middle and lower income households. Shipper spending rose only slightly reflecting the region's muted demand and rate environment. We see this reflected in shipment volumes being down 2.4% while spend was up 0.7%.
- [28:41]
B
Okay. And we're showing some of the Southeast again, those two year averages. Historical numbers right there on the screen as well. Check it out, Nick, what you see in the Southeast, my friend.
- [28:54]
A
Yeah, I mean, pretty aligned with Bobby's comments. I mean Carolinas are steady, but Florida in that area, it is a hard. And you're going to pay to get in and out of there. Pretty high rates. Spot rates are high, but volume is just It's a challenge right now, and you're seeing it play out. So it's residential especially, is very much impacted in that southeast region.
- [29:26]
B
Corinne. Southeast, our neck of the woods, of course, metro Atlanta. But, you know, Nick touched on that critical Florida market. Your thoughts?
- [29:34]
D
Yeah, you know, if I look at Atlanta traffic, which say that shipment volumes were way up, but, but I agree with Nick that, you know, getting in and out of Florida is expensive. It's a long state, you know, and a lot of that's going to other parts of the Southeast or they're going to come into ports there and move north from. From south Florida.
- [29:56]
B
Yes.
- [29:57]
D
So it does tend to be expensive just by the nature of more limited capacity.
- [30:04]
A
Yeah.
- [30:04]
B
And I agree with you. I was coming back from the airport last night from Manifest out in Vegas. The truck activity around 285, the perimeter was very healthy, folks, very healthy. That doesn't, I guess, necessarily always lead to great economic things, but just one
- [30:20]
D
little data point in there, that's one.
- [30:22]
B
One very subjective data point, I guess. So. Corinne and Nick and Bobby, there's one more thing I wanted to point out before we talk leadership with Nick. He gets some great advice there, and that is consumer confidence. There was a call out in the southeast region, the freight Payment Index, on the impact, the critical impact that consumer confidence has on many, many things. And it's been low by many measures. Consumer confidence was lower in fourth quarter. And, you know, when consumers aren't as confident, it can impact their decisions to purchase larger goods and in turn impact the freight market for sure. Get this. According to the conference board, y' all can see this graphic in front of us here. Consumer confidence may likely play even a bigger factor in first quarter 2026 as well. Their data shows that January's preliminary numbers reflected that US consumer confidence hit its lowest point, get this. Since 2014. Wow. 12 years. Which dropped even below pandemic depths from a few years ago. So we're going to see, keep our finger on the pulse of that and see if it carries it deeper into the new year. All right, so Bobby, Nick and Corinne, let's talk leadership for a minute. So, Nick, I think on the last show we did with Bobby and the gang, one of the things that we looked at was by some measures, data driven measures. We're looking at historic levels of uncertainty, very prevalent out in the marketplace. So I want to ask you, Nick, with the job you and your team have to do, supply chain wise, what's a key element to your leadership approach that really helps your organization Optimize its success in these uncertain times.
- [32:09]
A
Yeah, we have a road map and a strategy. Over the next three years, our goal is to enhance our technology, our capabilities along with, you know, cost and productivity initiatives. There will be a new terrorist, there will be a shortage, there will be a supply chain disruption. I think that's the new norm since you just showed from 2020. Right. We got to stay the course, got to have a long term roadmap and just be flexible and know something disruptive will happen. Kind of a funny story. About a month ago, my wife and I went up to Richmond to see a comedy show. And this comedian is known for interacting with the crowd. And he looks right at me in the beginning and goes, sir, what do you do for work? And I said, I work in supply chain. And he laughs and he goes, you know, that's a fancy word no one knew before COVID And I mean it's the reality with, you know, even think within the organization. We just operated, we delivered, we worked with partners, we, we picked the freight, we, we shipped the freight. Right. We worked with vendors. But now we're, we're up in front and we all got a little fat and happy during COVID and now we've got to type in our boats and be a little bit more efficient. So it's stick with the plan, this is the new norm. But have a roadmap and you're going to have to alter and you're going to have to pivot, but stay the course.
- [33:24]
B
Nick, love that and I love to learn more about the exchanges with the comedian. Me and Amanda took in our first comedy show in a long time during the holidays late last year and had some similar experiences. But Corinne, kidding aside, there's probably lots of comedian analogies we could draw on here. But Corinne, thinking of his Nick's leadership advice there, you know, having a plan, you're going to have to make some pivots regardless. But you got to have the plan right and thinking out way ahead, which helps you make plan for contingencies and alternatives and what you hear there. Karina, what would be your own advice to supply chain leaders out there?
- [34:00]
D
Maybe, yeah, I think to Nick's point is, you know, he's fully aware or the Ferguson business is fully aware. We live in this new never normal. So not new normal, but this new environment that is never normal. There's always going to be a disruption and that may come in the form of many different things in the marketplace. From disruption, from things like tariffs, from increase or decrease in demand, from changing Interest rates, all of those will come into play. So the ability to leverage technology to model really a multitude of scenarios for your business becomes very important to being responsive to market opportunity as well as market constraints or challenges that exist. So whether we're looking at, you know, top line revenue growth or managing costs or lowering cost basis because we're more efficient in how we're planning the business that, you know, but we've got to have both of those things. So technology has got to be part of that equation in making the talent more effective at what they do every day. Let's, let's get them out of spreadsheets, let's get them into solutions that help model those scenarios for their business.
- [35:12]
B
Well said, Corinne. Well said.
- [35:14]
D
The spreadsheet, I do have to say, Nick, I haven't heard many people say they got fat and happy in the middle of COVID So I'm glad it was good for your business. Certainly everybody recognizes what supply chain is and how critically important it is to all these businesses. But I know a lot of people that were really scrambling during those early, early months in the COVID environment.
- [35:38]
B
And your spreadsheet comment, Corinne, we talk a lot, we talk a lot. Supply chain planning and many other things because we use spreadsheets for everything in supply chain and elsewhere. But there's limits. There's limits, big limits, hard limits.
- [35:51]
D
We introduce risk into our business when we rely on those spreadsheets on a regular basis versus having, you know, an actual model or comparing past performance. You know, I, I understand why it gets done from time to time, but when it becomes the long standing platform for decision making, that's risk we can control.
- [36:12]
B
Yes, Corinne, absolutely that. And Bobby, we got you back. Great to see you, my friend. Just in time for a question you could not answer about what's ahead because Bobby cannot as part of the financial regulatory. That's not something he can weigh in on. But Bobby, we're going to make sure you can tell us where we can get our hands on the freight payment index in just a moment. But here's what I'd love to do because I shared this graphic earlier and Corinne, my first thought, to get a spreadsheet and map out this and then map out all the, the volume. But instead of that, because I got to drop that old mindset, I'm going to see if Chat GPT can build out a nice little chart and compare and contrast at least this one index of consumer confidence with the shipping levels that we've seen and we'll bring back. Not before we wrap this show but we'll bring that to you maybe on the next show, the next installment next quarter. Krin, I'm going to give you really quick Kryn, you think there's a tight correlation there, a really solid correlation between consumer confidence and freight levels.
- [37:18]
D
It depends on the industry that you're in. Obviously a lot of product that moves throughout the country is consumer driven. So it is a big portion of the total volume and we're all competing. So volume doesn't recognize if it's business to business volume, industrial volume, et cetera or if it's consumer driven volume. But it's volume. And since we are talking about having constrained capacity in a number of areas that is going to either drive up cost or free up capacity. So it comes into play across the board, especially with high seasonality like going into fourth quarter for holiday seasons, even home improvement. You know what we see going into holiday seasons in North America is that people will do some home improvements because they're expecting guests. Right. So they'll, you know, make sure the plumbing is working well. Thank you very much to the Ferguson team. But also they may, you know, buy some new furniture or do some other things like that which drive overall volume as well.
- [38:19]
E
Yeah, that would be my comment as well. It depends on, you know, what we've seen in the past is consumer confidence may wane but that doesn't mean that they stop spending. It means that they prioritize things differently. And so you know, where they may cut back on buying clothes and stuff as Karen alluded to, they, they spend on the necessities. I, I still need to get, you know, my stuff fixed in my house. I still need to, you know, get my car fixed. I still need to do things that still generate economic activity. I just prioritize it differently and that's going to impact it, but it doesn't shut everything down.
- [38:53]
B
That's great perspective. Bobby And Nick, I'm not sure if you've got a comment, but it reminds me we've got a refrigerator that is the loudest ice maker of all time. You can hear it at night, you can hear it in the morning. I mean it, it will be like that Edgar Allan Poe. Wasn't there a poem about the heartbeat that the author could hear everywhere? And we've kept prolonging our purchase because it's just the ice maker. Everything else works great. So somewhere there's a purchasing and afraid analogy. But Nick, really quick, quick comment. Consumer confidence. Any comment on what Corinne and Bobby shared there around how consumer confidence may impact the freight market.
- [39:36]
A
Yeah. I mean I'll, I'll speak from Ferguson's perspective. Right. We purposely try to be 50, 50 like that, residential and non residential and we're feeling the confidence, the lack of confidence on the residential side. Right. People are discretionary money and repair maintenance versus I'm going to redo my kitchen and, and, and bathroom. It's felt right now and, and you kind of see it there. But on the flip side, you know, the infrastructure deal, all of these data centers, all this investment in AI, there's some really large projects going across the country and they are eating up capacity. These are projects like we've never seen before. So I agree it can, it's not always, I think a direct correlation because there are things that can be driving the economy that aren't just retail.
- [40:26]
B
So. Yeah, well said Nick. Man. Let's take a look ahead. Right. That consumer confidence thing, that was a measure in January and that's certainly a forward looking measure for the rest of the first quarter. Perhaps home sales saw some interesting data come in for January as well. Some, some disappointing data. Usually we look at construction activity as well. Nick had a great comment around data centers built out. I think there's 3,000 data centers under construction or currently planned right now just in the US Just in the US
- [40:58]
D
and that's the same number I heard. Yeah.
- [41:00]
B
Is it?
- [41:01]
D
It's huge. It's huge.
- [41:02]
B
And so think of the infrastructure demands just from electricity standpoint. Just on that there's other water and plenty of others. But Nick, I want to circle back on your crystal ball for the domestic freight market and what we may see in the months to come. Nick, what would be some of your thoughts, sir?
- [41:19]
A
You know, I think we've been saying it for a while, but everybody continues to say the outlook is positive in, in the future.
- [41:26]
E
Right.
- [41:26]
A
We gotta be optimistic about that. I do believe we're in the ninth inning of the freight recession not booming. But I don't think it's going to be this free fall. I think capacity is going to continue to be a little bit challenging and I think if I was to share, you know, advice, it's have a plan, do your RFPs early locking those rates and capacity. You know, I was talking to our director of domestic and he was in our Ocean and International during COVID and he said feels a lot like land is looking like kind of ocean freight. Post Covid, you better have your close friends and your relationships and lock in that capacity and you know, potentially lock in that favorable right now was his perspective I'm like, that's pretty interesting. But I feel like we've been saying this for a while, so I hope. Because that means volume's up and the economy's doing good from that standpoint.
- [42:21]
B
Nick, I like it. I like it. Corinne, what's your fearless prediction?
- [42:26]
D
Yeah, I like that insight. I like that comparison, Nick. I think that's a great way to look at capacity overall. What I would encourage our audience to do is to make sure that they've got those relationships in place, that they are locking in those relationships where they can and that they behave like a shipper of choice. Right. Like they're a good trading partner with those carriers in the mix as well. Because when things get tight, we go the extra mile for our friends where that doesn't necessarily happen. If you've got contentious relationships.
- [42:59]
B
Yes.
- [42:59]
A
You find out who your friends were during COVID that's for sure.
- [43:02]
D
Yeah. Amen.
- [43:04]
B
It's so true. And, you know, that was a big. It always seems to be a theme when I go out to conferences out there, because we use conferences as a way to invest in the relationships that we work with and. And trade with and do business with. And your relationships matter so much, and it's so obvious to many folks. But I'm very grateful for the reminders we get in a wide variety of ways. So, Nick, Corinne, and Bobby, I wish we had another hour because I think we need to put this freight market on a couch and psychoanalyze it a bit more. Right. But Bobby, for starters, we're about to get Corinne versus Pat and the key takeaway. Bobby. Let's make sure folks know how to find the Freight Payment Index out there and how to subscribe to it. What would be your advice there?
- [43:45]
E
Go to Freight US bank and sign up. It's an email subscription, no cost. Just trade us a little bit of information about who you are and it'll come to your inbox quarterly.
- [43:57]
B
Man, what a deal. What a deal. And again, we're making it really easy. We're dropping the link right there. You can check that out. All right. So, Nick, how can our audience learn more about all the cool things that Ferguson Enterprises is up to?
- [44:11]
A
So if they want to learn about Ferguson, you can go to our website, corporate.ferguson.com. we got 1700 locations. We're in every state. We're in Canada. So I'm pretty sure somebody can find1Ferguson.com if you would like to purchase some stuff. And then also we have Ferguson home, so Mrs. Bamucci likes to visit there often. New kitchen, bathroom and lighting. They're absolutely gorgeous. So highly recommend. And if you do need a new ice maker, that's a great place to start because we, we sell a lot of appliances. Very nice appliances.
- [44:46]
D
Very nice appliances.
- [44:48]
B
Nick, I'll be coming to you for a quieter refrigerator soon. Who knows? But Ferguson.com drop link right there. And Nick, really have enjoyed your perspective and of course Bobby's perspective. But Corinne, you got, and this is a tough question, if you had one key takeaway to identify and make sure folks don't forget that from this great conversation we've had here today, what would that be?
- [45:11]
D
Yeah, first of all, loved having Nick for his commentary on what they're actually experiencing and combining that with Bobby and the U.S. bank's team perspective and good data sources in the marketplace. So remember that this is actual real data, not surveys. So I think it's great information for all of us to use as supply chain professionals as an indicator of what's actually happening in the market or a short term indicator of what's happening and to look at that over time. So one takeaway, Facts, not feelings. So look at these facts and understand how to apply them to your business. This is a report that is driven off of $46 billion in freight payments that have been processed. So it's good, it's deep, it gives you those regional views. We saw a couple of examples of very different environments from the Southwest to the Northeast. And the overall goal is to help everyone make better decisions. So facts, not feelings. Let's use this as a tool, a guide to help us all make a better impact on our businesses.
- [46:20]
B
Well said. Well said, Corinne Bursa. And folks, go check it out. Go download it. We got links there. And just to reiterate, you can go to Freight usbank.com and get your own copy. And we got the hyperlink right there. I'll tell you what, this was a wonderful discussion. I've got my 17 pages of notes right here. I want to thank our guests, starting with Bobby Holland, director of freight business analytics at U.S. bank. Bobby, you know, not only did you deliver as you always do, but we had a little technical issue and somehow you were able to keep adding perspective while troubleshooting and fixing the challenge. That's remarkable, Bobby.
- [46:57]
E
Nobody needs to see me to get the measurements.
- [47:01]
B
I love your sense of humor too, Bobby. All right, Nick Palmucci, senior director, Supply chain at Ferguson Enterprises. Nick, outstanding discussion. Really enjoyed your perspective.
- [47:11]
A
Yeah, thanks for having me. This was fun.
- [47:13]
B
It was, it was. I feel smarter from the three of y' all and Corinne Bursa, as always enjoyed your perspective here and look forward to our next show together.
- [47:22]
D
Looking forward to it and enjoy the conversation today. Thanks for bringing all of the information to the table, guys. We really appreciate it.
- [47:29]
B
Sure.
- [47:29]
E
Discussion.
- [47:31]
B
So Bobby and Nick and Corinne, thanks again to all of y'. All folks. You got homework. Corinne and Nick and Bobby really brought, as promised, some actionable perspective here today. Data driven and market driven. You got to take one thing and put it in action. Share it with your team. You all know that deeds not words is how we all can make for a much more successful 20, 26 and beyond. So with all that said, on behalf the whole team here at Supply Chain Now, Scott Luton Challenge you do good, give forward, be the changes needed. We'll see you next time right back here on Supply Chain Now. Thanks everybody.
- [48:02]
C
Join the Supply Chain now community. For more Supply chain perspectives, news and innovation, check out supplychainnow.com subscribe to Supply Chain now on YouTube and follow and listen to Supply Chain Now. Wherever you get your podcasts.