[00:00:00] Nick Palmucci: Everybody continues to say the outlook is positive in the future, right? We gotta be optimist so that I do believe we’re in the ninth inning of the freight recession. Not booming, but I don’t think it’s gonna be this freefall. 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.

[00:00:23] Nick Palmucci: Locking those rates in capacity.

[00:00:28] Voiceover: 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.

[00:00:40] Scott W. Luton: Hey, good afternoon, good evening, good morning. I might have said that in reverse order, but Scott Luton and Karin Bursa with you here on Supply Chain Now.

[00:00:50]

[00:00:50] Karin Bursa: I’m doing great. I’m just gonna say good day and then I can cover all that. So it’s great to be with you. And I wanna add my welcome to all the supply chain movers and shakers out there that are joining us today.

[00:01:01] Scott W. Luton: It is a great time to be in supply chain. I thought you were gonna add that.

[00:01:05] Karin Bursa: Thank you. It’s, it’s a great time to be in supply chain

[00:01:07] Scott W. Luton: it.

[00:01:07] Karin Bursa: Sure. And you are, you’re just back from Manifest, so you are probably been swimming in it for 20 hours a day for the last three days.

[00:01:15] Scott W. Luton: We’ve got a lot between the ears. But we got room for another terrific truckload of wonderful actionable perspective here today, Karin.

[00:01:23] Scott W. Luton: Today we continue a long running terrific series Here we’re gonna be sharing key insights from the latest quarterly edition of one of the leading transportation industry resources, the U.S. 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.

[00:01:42] Scott W. Luton: It poses a ton of value. We get feedback regularly. Karin 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 gonna get a really good sense of what transpired in the fourth quarter, 2025.

[00:02:06] Scott W. Luton: We’re also gonna be sharing. A few nuggets that’s gonna help you prep for where we are now and where we’re heading. You know, 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.

[00:02:27] Scott W. Luton: So, great show coming up. Alright, so Karin 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, uh, 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.

[00:03:03] Scott W. Luton: So, Karin. Lots of golden nuggets here today. Is that right?

[00:03:08] Karin Bursa: It is indeed. And I’m gonna underscore what you just said. $46 billion in transactions. Wow. 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.

[00:03:31] Scott W. Luton: Hey, I am with you and Bobby and Nick. Folks. We’re gonna bring on both, and Karin always brings it. So you’re in for a treat here today. And I want to introduce Karin 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.

[00:03:51] Scott W. Luton: Hey. Hey Bobby. You’re back. Good morning, good afternoon. How you doing?

[00:03:55] Bobby Holland: Doing well. How are you guys doing?

[00:03:56] Scott W. Luton: 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.

[00:04:05] Nick Palmucci: Hello, how are you? Thanks for having me.

[00:04:07] Scott W. Luton: 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. So let’s do this. We’d like to start with fun, warmup questions around here. And Nick, I’m gonna 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.

[00:04:31] Nick Palmucci: Yeah. My daughter’s, uh, pretty fortunate. She’s a sophomore. We live in Virginia. Uh, 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 that they have won five state championships in a row 13 total as a school. So they’re pretty much a powerhouse to begin with.

[00:04:53] Nick Palmucci: But the seniors last year and this year have never lost a game in high school ever. Oh my gosh. 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 a pretty amazing team and we’re on to lacrosse now, but it was an intense year and, uh, hopefully number six next year.

[00:05:24] Scott W. Luton: Nick, that is remarkable. And Karin, I like how you brought all the data with him. Yes, yes. As we celebrated. Right? Uh, a lot of good stuff there, Nick. Uh, alright, so Bobby, I’m gonna switch gears with you now, Bobby. On past shows we’ve talked about some of your grilling prowess. Mm-hmm. Uh, and talked about some of those dishes there.

[00:05:42] Scott W. Luton: And we’ve got St. Valentine’s Day around the corner a couple weeks or so from now. Is it gonna be cranking up real time with your significant other or is it gonna be heading out to a nice restaurant, Bobby, which is it?

[00:05:52] Bobby Holland: We will be spending it with my mother-in-law.

[00:05:56] Scott W. Luton: Okay.

[00:05:56] Bobby Holland: She’s a widow. We’ll be having a nice dinner with her.

[00:05:59] Scott W. Luton: That is outstanding. Outstanding. And uh, what’s her favorite dish? Bobby, what’s one of the favorite, favorite dishes?

[00:06:06] Bobby Holland: Well, it’s Italian. Um,

[00:06:08] Scott W. Luton: okay, you have me there. You have me at Italian, so you have to send us some pictures, Bobby, but what a great thing to do. Alright, so Karin, same question. Are there any, uh, annual Valentine’s Day traditions in the Bursa household?

[00:06:21] Karin Bursa: We usually like to do some kind of experience, so not necessarily going to a restaurant, but we’ve done things like on 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 that.

[00:06:44] Scott W. Luton: Well, I look forward to that and we’ve gotta create some new traditions here in the Luton household. But folks, it’s great to have Nick and Bobby and Karin 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.

[00:07:04] Scott W. Luton: But if you had to put one sentence long theme that’s gonna reflect today’s tenor of the conversation and the vibe. What would that be, Bobby?

[00:07:14] Bobby Holland: That freight market is tightening as costs rise and regional trends diverge in Q4 2025. We’ll see a lot of, like you said, a lot of stuff going on.

[00:07:24] Scott W. Luton: Okay. I hate the cost rise part.

[00:07:26] Scott W. Luton: That’s my least favorite part of that whole sentence, but hey, we’re gonna dive into it at the national level. We’re gonna dive into it at the regional level and just like you see on your screen there. Download the report, right? Follow along with us. Give us your thoughts. Spill coffee on it, dog gear 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.

[00:07:49] Scott W. Luton: Alright, so we’re gonna get into eight critical takeaways in a minute. But let’s level set a little bit more on a couple key components for our conversation. And Nick, so this is your first time with us here on Supply Chain Now I know a lot of folks know are familiar with Ferguson Enterprises, right?

[00:08:03] Scott W. Luton: Great company. But just tell us a little bit more about yourself and what the company does.

[00:08:08] Nick Palmucci: 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’ve had quite a few different roles here, strategy roles, and now I’m in the logistics department for the last three years.

[00:08:25] Nick Palmucci: So Ferguson, right. We are a water and plumbing and air for non-residential and residential and North American construction markets. Mm-hmm. We provide expertise in our wide range of products, uh, and services for plumbing, HVAC appliances. Lightning, uh, to PVC, water and Wastewater solutions. So we’re headquarters here.

[00:08:51] Nick Palmucci: I’m sitting here in Virginia, in Newport News, Virginia, just north of Virginia Beach. Our sales are north of $30 billion and we have over 35,000 associates and over 1700 locations across the country.

[00:09:04] Scott W. Luton: Wow, man. An army. Really big enterprise. And I’ll tell you, that’s a, you’re in a great position to add very unique, uh, boots on ground perspective to this conversation.

[00:09:14] Scott W. Luton: Karin, I’ve got a different question for you. Uh, now that we’ve kinda learned more about Nick and Ferguson Enterprises, you’ve been a long time 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?

[00:09:29] Scott W. Luton: Karin.

[00:09:30] Karin Bursa: Well this index is, 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.

[00:09:51] Karin Bursa: 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, um, 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.

[00:10:17] Karin Bursa: So Bobby, look forward to hearing what you bring to the table every quarter. Thanks for sharing it with us.

[00:10:23] Scott W. Luton: Same and facts, not feelings. That’s another one of your mantras

[00:10:26] Karin Bursa: career, right? Indeed. Yep. Yep. I’m

[00:10:28] Scott W. Luton: try to keep up.

[00:10:29] Karin Bursa: When freight moves, that means the economy is in motion. So that’s good news, bad news.

[00:10:35] Karin Bursa: We’re gonna find out for Bobby in just a minute.

[00:10:37] Scott W. Luton: That’s right. So before we get into these eight key takeaways at the national level and at the regional level, Bobby, I wanna make sure for our newer audience members that may be newer, newer to this resource, let’s make sure they know what the U.S. Bank Freight Payment Index is, how it works, and how they can get it.

[00:10:54] Scott W. Luton: Tell us more, Bobby.

[00:10:56] Bobby Holland: 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, uh, quarterly spend and shipment volumes. And we measure the deltas and velocity. So it’s a reflection of the changes in the marketplace as well as augmented by freight rates, uh, based data since we talk a lot about that from debt.

[00:11:24] Scott W. Luton: Right. And my favorite part. One of my favorite parts is the region by region view. We talk about this a lot. It really breaks down some of the common, but also some nuances you’re gonna find and trends and going zone you’re gonna find across the different regions of the domestic freight market. So I think the table is successfully set.

[00:11:45] Scott W. Luton: Karin, Nick, and Bobby. Alright, so Bobby, we’re gonna 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.

[00:12:00] Bobby Holland: So from a national perspective, uh, we see nationally that industry capacity continue to shrink In Q4, driven by, we believe carrier exits regulatory changes in stricter driver requirements.

[00:12:13] Bobby Holland: And while we saw that shipment volumes grew slightly, we see that it was at a higher cost. Superior drivers in, uh, smaller fleets strain capacity. For national shipments and spending. We saw freight volumes rebounded from Q3, but remain well below historical norms. Shipper spending rose for the third straight quarter, outpacing volume growth as tighter capacity, push rates higher.

[00:12:36] Bobby Holland: 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 flatter, declining, uh, the standouts this quarter were the northeast and the southwest for their contrasting trends.

[00:12:53] Nick Palmucci: Mm-hmm.

[00:12:53] Bobby Holland: As well as the Northeast seeing robust gains in the southwest facing steep declines. So all over the map, you’re literally

[00:13:00] Scott W. Luton: all over the map. They’re so easy to analyze things, they’re all over the map. Uh, Nick thinking nationally, right? Especially given the organization with your footprint, your thoughts, what we’re seeing from the domestic freight market in Q4.

[00:13:14] Nick Palmucci: Yeah, I mean, capacity is definitely tightening, right? I think a lot of companies post COVID, right, are, are learning what they wanna invest in and solve volumes, right? So how do we, how do we tighten our belts there? Um, but volume is starting to pick up and the lack of drivers and a lot of the regulatory changes are starting to really impact.

[00:13:37] Nick Palmucci: Especially those pockets that Bobby just talked about, but our carriers are, are holding to us to those committed capacities and if we need additional capacity, they’re charging appropriately and we’re starting to, to feel it from that standpoint.

[00:13:53] Scott W. Luton: Karin, they’re gonna hold us to these commitments we’re making.

[00:13:56] Scott W. Luton: And the other thing he mentioned there, unfortunately, we have had drivers being kind of pushed out, at least for the time being, uh, of the driver population due to regulatory and other, and other, uh, challenges out there. But your thoughts, Karin, at a higher national macro level.

[00:14:12] Karin Bursa: 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.

[00:14:18] Karin Bursa: 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, um, and that could PA impact maybe as many as 200,000 drivers.

[00:14:48] Karin Bursa: 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 gonna 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.

[00:15:12] Scott W. Luton: Karin, excellent. Call out something. We’re gonna be, keep keeping our finger on the pulse of to see if the reg regulatory policies may become more flexible. In the months ahead, we shall see Karin, Nick, and Bobby. Good stuff. Now I wanna move down into a region by region. Look like we do. Right? And we’re gonna start Bobby out West, uh, with the Western region.

[00:15:34] Scott W. Luton: Uh, some of your key takeaways there from what’s taken place, freight wise, economic wise, from the west.

[00:15:40] Bobby Holland: Okay, 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 shipment volumes being down 1.3%.

[00:15:55] Bobby Holland: However, that was an improvement supported by changes in trade policy and a rebound in imports. But we see the shipper spending continue to climb and remains. But even though it remains below pandemic levels, it was still up 2.6% over the last quarter.

[00:16:08] Scott W. Luton: Alright, so Nick out west, uh, beyond what Bobby shared, your perspective, your team’s perspective, may agree, may disagree, may be somewhere in the middle.

[00:16:16] Scott W. Luton: What’d you see out west about, uh, Nick?

[00:16:19] Nick Palmucci: Yeah, I mean, for the last couple years, Southern California has been a challenge, right? And with this tariff activity, it did gain any better, but it feels a little bit better and, and capacity’s a little bit better. Where we’re very challenged right now is the northwest.

[00:16:32] Scott W. Luton: Hmm.

[00:16:33] Nick Palmucci: That seems to be very challenging for us and we’re trying to pinpoint kind of the opportunities there, but the spot market capacity, um, we’re finding that we have to get creative, uh, and, and think more final mile than truckload and kind. Leverage different, you know, carriers or kind of think outside of the box of late and especially in the fourth quarter.

[00:16:54] Scott W. Luton: Yeah, good stuff there Nick. I just spent a little bit of time up in the beautiful Pacific Northwest and fortunately I did not, not have to, I was not tasked with any freight challenges like the team there, Nick. ’cause easy in and out and great food, no freight. Karin the West. Your thoughts.

[00:17:13] Karin Bursa: Yeah, it, it’s good to hear that some of that volume is coming back now in the west.

[00:17:17] Karin Bursa: 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 gonna be.

[00:17:42] Scott W. Luton: Yeah, that’s right. Cor and Nick lot, lots of good stuff there. And Bobby, appreciate your data-driven perspective on the front end. And that’s where I’m gonna pick up on two quick thoughts before we move on to the next region because one of my favorite parts about the report is you’re gonna see like data, like hit this right here.

[00:17:57] Scott W. Luton: This is focused on the west region and you look where the. Spend and the shipping volume has been the last couple 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, and we’ll show this for each of the regions here too, but you know, one thing that certainly impacts domestic freight.

[00:18:19] Scott W. Luton: 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%.

[00:18:41] Scott W. Luton: That compares with NR F’S forecast at 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.

[00:19:11] Scott W. Luton: Of 0.4%. Now, some of the sectors showing declines in December. Furniture that plays a role, role in freight, right? Clothing, accessories, electronics that plays a role in freight while building and garden centers saw some of the strongest gains. And Bobby, I wanna start with you. What were your key takeaways from the Southwest bombing?

[00:19:31] Bobby Holland: Well, the Southwest saw a brief recovery in shipments after a shark Q3 drop. We see this is reflected by the fact that, uh, 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, Titan capacity, again, as we’ve mentioned, driven by regulatory changes and labor challenges 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%.

[00:20:05] Scott W. Luton: Alright, Nick, moving down from the west to the southwest, what’d you and your team see?

[00:20:10] Nick Palmucci: You know, the Southwest has been pretty quiet. Uh, capacities. There rates are honestly pretty solid ’cause there is capacity. What we’re finding is kind of to your retail points there, very soft on the residential, but more of those large projects, data centers, all of that are keeping kind of the market afloat there.

[00:20:37] Nick Palmucci: We anticipated with a lot of the, the regulatory issues, there could be some challenge there. We’re just not seeing them right now. So it’s kind of the status quo in, that’s Southwest, which was not what we anticipated.

[00:20:49] Scott W. Luton: Mm. You know, Karin, I love the, I mean, what we just heard there from Bob and Nick is, while it’s so important to, to bring the data in and then bring the out in the market perspective in, but Karin, how about you from the South Southwest?

[00:21:02] Scott W. Luton: What’d you see there?

[00:21:04] Karin Bursa: Yeah, I, 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 2025. So even though we saw some recovery in fourth quarter on an annualized basis, certainly.

[00:21:30] Karin Bursa: 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.

[00:21:45] Scott W. Luton: Yes. Uh, excellent points. Karin and folks we’re looking at the, the Southwest, the two.

[00:21:50] Scott W. Luton: 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 gonna 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.

[00:22:06] Scott W. Luton: Alright, so Bobby, what’d you see there in the Midwest?

[00:22:10] Bobby Holland: On the Midwest, we saw improvement in shipments in the fourth quarter, uh, supported by modest gains in manufacturing and construction. However, inbound freight from Canada and overall consumer demand. Remains subdued, which kept annual volumes below.

[00:22:23] Bobby Holland: Last year we saw shipper spending going up, reflecting modest rate increases, and this was reflected in, uh, a rise of shipment volumes at 3.5%, but spending was up 5%. So outpacing the, showing that it was cost more to ship slightly more.

[00:22:41] Scott W. Luton: Yeah. So Nick in the Midwest, what’d you see?

[00:22:45] Nick Palmucci: So we, we get a lot of carriers reaching out to fill capacity kind of in the Midwest right now.

[00:22:51] Nick Palmucci: And when I ask why, I get a lot of answers around a soft automotive kind of from a perfected 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, and building out. But there’s capacity in the Midwest and we do feel it.

[00:23:11] Scott W. Luton: Yep. Alright. Karin. The Midwest. What’d you see?

[00:23:15] Karin Bursa: 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, uh, some important insights. ’cause I think we all recognize the automotive sector has, you know, it’s had significant pressure on it as well and it follows both kind of a durable goods as well as a retail.

[00:23:37] Karin Bursa: Impact in the business as well as interest rates, which I know, you know, impact your business, Nick as well, very much when the housing starts and all that kind of stuff. So interesting to hear just what you’re experiencing in the Midwest.

[00:23:50] Scott W. Luton: Yeah. You know, there was a call out in the Midwest region. Karin, Nick and Bobby about slightly decreased imports from Canada.

[00:23:59] Scott W. Luton: Right? And the, 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 US goods to Canada.

[00:24:16] Scott W. Luton: 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 timeframe. And Karin, I don’t have it right in front of me here today, but I know that adult beverages, you know, the, um, bourbon and whiskey industry in particular has been hit hard with, it has this move here in Canada, right?

[00:24:38] Scott W. Luton: And elsewhere. Is that right?

[00:24:39] Karin Bursa: It that that’s, that’s a fact. But also the, the automotive sector, as Nick was saying, um, is, is a big part of that trade that’s occurring there too.

[00:24:50] Scott W. Luton: That’s right. Okay. So we’re gonna 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 in Northeast.

[00:25:03] Scott W. Luton: Your thoughts.

[00:25:05] Bobby Holland: 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.

[00:25:26] Bobby Holland: Big retail up here, especially among higher income households. This is what helped drive gains despite pockets of weakness in Pennsylvania and New Jersey.

[00:25:34] Scott W. Luton: Alright, so Nick, uh, the Northeast, uh, what’d you see?

[00:25:39] Nick Palmucci: We’re seeing similar. Uh, it’s high activity. It’s a strong market right now and we’re getting charged for it.

[00:25:45] Nick Palmucci: 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 ’cause 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.

[00:26:02] Nick Palmucci: ’cause there’s a lot of lanes that you can kind of. Fill some of your capacity with what you can’t do in other areas.

[00:26:08] Scott W. Luton: Yeah, well said Nick. It is an interesting region that does punch above its weight, as Bobby said, a good old boxing analogy there, Karin the Northeast. What’d you see?

[00:26:18] Karin Bursa: Pretty much the same thing that, that Bobby and Nick have shared here.

[00:26:21] Karin Bursa: You know, you’re, 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, we are continuing to see higher costs, uh, that are coming from either less of available capacity or other increases in cost, 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.

[00:26:57] Scott W. Luton: Yes. And Karin, I’m gonna pick up where you left off. You mentioned a couple times those cost increases. I wanna, uh, share. Uh, you know, we track the manufacturing industry is 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.

[00:27:15] Scott W. Luton: 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.

[00:27:35] Scott W. Luton: For a 10th straight month. In fact, its primary me measure of manufacturing activity showed that it was, its 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 at Reuters, the one thing that continues to be up, and this is where I go back to your analogy, your, your, your comments there, Karin input costs for manufacturers are really across the country.

[00:28:04] Scott W. Luton: So we may have lost Bobby just for a second. Maybe sometimes the camera just goes out. That happens from time to time. Yeah, it look

[00:28:09] Bobby Holland: like the camera’s out. Can you guys hear me?

[00:28:11] Scott W. Luton: We can. We gotcha. Hey, one outta two ain’t bad. We’ll take it. So, so Bobby, let’s talk about the southeast. Me and Karin’s. Neck of the woods.

[00:28:21] Scott W. Luton: Actually, Nick, you being in Virginia, you’re in our neck of the woods too. So southeast wise, what’d you see there, Bobby?

[00:28:26] Bobby Holland: 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.

[00:28:38] Bobby Holland: Shipper spending rows only slightly reflecting the region’s muted demand and rate environment. We see this reflected in shipment volumes being down 2.4% while uh spend was up 0.7%.

[00:28:51] Scott W. Luton: Okay, and we’re showing some of the, uh, southeast, uh, again, there’s two year averages, historical, uh, numbers right there on the screen as well.

[00:29:00] Scott W. Luton: Uh, check it out. Nick. What’d you see in the southeast? My friend?

[00:29:05] Nick Palmucci: Yeah, I mean, pretty aligned with Bobby’s comments. I mean, Carolinas are steady, but Florida in that area, it is, uh, hard and you are going to pay to get in and out of there. Pretty high rates. Uh, spot rates are high. Um, but volume is just, it’s a challenge right now and you’re seeing it play out.

[00:29:28] Nick Palmucci: So it’s residential especially is very much impacted in that southeast region.

[00:29:35] Scott W. Luton: Hmm. Karin Southeast, our neck of the woods, of course, Metro Atlanta. But you know, Nick touched on that critical Florida market. Your thoughts.

[00:29:44] Karin Bursa: Yeah. You know, if I look at Atlanta traffic, which say that shipment volumes were way up, but, uh, but I agree with Nick that, um, you know, getting in and out of Florida is expensive.

[00:29:55] Karin Bursa: It’s a long state, uh, you know, uh, and a lot of that’s gonna come through other parts of the southeast or they’re gonna come into ports there. And move north from, um, from south Florida.

[00:30:06] Scott W. Luton: Yes.

[00:30:07] Karin Bursa: So it, it does tend to be expensive just by the nature of more limited capacity.

[00:30:14] Scott W. Luton: Yeah, and I agree with you. I’ll come back from the airport last night from Manifest out in Vegas, uh, the truck activity around mm-hmm.

[00:30:22] Scott W. Luton: 2 85. The perimeter was very healthy, folks, it was very healthy. That doesn’t, I guess, necessarily always, uh, lead the great economic things, but, uh,

[00:30:30] Karin Bursa: just one little data point in there.

[00:30:31] Scott W. Luton: That’s right. One very subjective data point, I guess. So Karin and Nick and Bobby. There’s one more thing I wanted to point out before we talk leadership with Nick and get some, uh, great advice there and that is consumer confidence.

[00:30:47] Scott W. Luton: There’s a call out in the southeast region of 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 per to purchase larger goods.

[00:31:11] Scott W. Luton: And in turn, impact 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.

[00:31:31] Scott W. Luton: Get this. Since 2014. Wow. 12 years. Wow. Which dropped even below. Pandemic had depths from a few years ago. So we’re gonna see, keep our finger on the pulse of that and see if it carries it deeper into the new year.

[00:31:55] Scott W. Luton: Alright, so Bobby, Nick and Karin, let’s talk leadership for a minute. So, Nick, I think one of the last show we did with Bobby in 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.

[00:32:13] Scott W. Luton: So I wanna ask you, Nick, the, 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?

[00:32:26] Nick Palmucci: Yeah, we have a roadmap and a strategy over the next three years. Our goal to enhance our technology, our capabilities, along with, you know, cost and productivity initiatives.

[00:32:37] Nick Palmucci: There will be a new tariffs, there will be a shortage, there will be a supply chain disruption. I think that’s the new norm that you just showed from 2020, right? Uh, we gotta stay the course. Gotta 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.

[00:32:59] Nick Palmucci: And this comedian’s 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. So COVID, and I mean, it’s a reality with, you know, even think within the organization.

[00:33:17] Nick Palmucci: We just operated, we delivered, we, we worked with partners. We, we picked the fray. We, we shipped the fray, 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 gotta type in our belts and be a little bit more efficient. So it’s, stick with the plan.

[00:33:33] Nick Palmucci: Uh, this is the new norm, but have a roadmap and you’re gonna have to alter and you’re gonna have to pivot. But, uh, stay the course.

[00:33:40] Scott W. Luton: Nick, love that. And I’d love to more learn more about, uh, the exchanges with the comedian. Uh, me and Amanda took in our first comedy show in a long time during the holidays, uh, late last year and had some similar experiences.

[00:33:54] Scott W. Luton: But Karin kidding aside, there’s probably lots of. Comedian analogies we could draw on here, but Karin, thinking of his Nick’s leadership advice there, you know, having a plan, you’re gonna have to make some pivots regardless, but you gotta have the plan, right. And thinking that way ahead, which helps you make plan for contingencies and alternatives.

[00:34:13] Scott W. Luton: And what would you hear there, Karin? And what would be your own advice to supply chain leaders out there, maybe?

[00:34:18] Karin Bursa: Yeah, I think to Nick’s point is, you know, he’s fully aware 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.

[00:34:30] Karin Bursa: There’s always gonna be a disruption, and that may come in the form of many different things in the marketplace from a 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.

[00:34:53] Karin Bursa: 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 gotta have both of those things.

[00:35:14] Karin Bursa: So technology has gotta be part of that equation in making the talent. More effective at what they do every day. Let’s, let’s get ’em outta spreadsheets. Let, let’s get them into solutions that help model those scenarios for their business.

[00:35:29] Scott W. Luton: Well said Karin. Well said, uh, the spreadsheet,

[00:35:32] Karin Bursa: but 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 you.

[00:35:40] Karin Bursa: Your business. That’s right. 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, uh, scrambling during those early, early months in the COVID environment.

[00:35:55] Scott W. Luton: And, and the, your spreadsheet comment, Karin, we talk a lot.

[00:35:58] Scott W. Luton: We talk a lot. Supply chain planning and many other things because we use spreadsheets for everything and supply chain and elsewhere. But there’s limits. There’s limits. Big limits. Hard limits. What

[00:36:08] Karin Bursa: wait. 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.

[00:36:19] Karin Bursa: Um, you know, I, I understand why it gets done from time to time, but when it becomes the longstanding platform for decision making, that’s risk we can control.

[00:36:29] Scott W. Luton: Yes, Karin, absolutely. And, 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, uh, regulatory.

[00:36:43] Scott W. Luton: That’s not something he can weigh in on. But Bobby, we’re gonna 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 Karin my first thought to get a spreadsheet and map out this and then map out all the the volume.

[00:37:00] Scott W. Luton: But instead of that, ’cause I gotta drop that old mindset, I’m gonna go see if ChatGPT can build out a nice little chart in a 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.

[00:37:22] Scott W. Luton: Karin, I’m gonna give you really quick Karin. You think there’s a tight, uh, correlation there? Consumer co. A really solid correlation between consumer confidence and uh, freight levels.

[00:37:35] Karin Bursa: It depends on the industry that you’re in. Obviously a, a lot of product that moves throughout. Um. The country is consumer driven, so it is a big portion of the total volume and we’re all competing.

[00:37:47] Karin Bursa: So volume doesn’t recognize if it’s, you know, 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 gonna 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 improvements.

[00:38:16] Karin Bursa: 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 their 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, um, overall volume as well.

[00:38:36] Bobby Holland: 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 Karin uh, alluded to, they, they spend on the necessities.

[00:38:57] Bobby Holland: 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 gonna impact it, but it doesn’t shut everything down.

[00:39:10] Scott W. Luton: 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.

[00:39:17] Scott W. Luton: 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. Um, Edgar Allen Poe. Wasn’t there a poem about the, the heartbeat that that, that the author could hear everywhere and we’ve kept prolonging our purchase because it’s just the ice maker.

[00:39:36] Scott W. Luton: Everything else works great. So somewhere there’s a, a, a purchasing and freight analogy. But Nick, really quick, quick comment. Consumer confidence. Any comment on what Karin and Bob shared there around how the consumer confidence may impact the freight market?

[00:39:53] Nick Palmucci: Yeah, I mean, uh, I’ll, I’ll speak from Ferguson’s perspective, right?

[00:39:56] Nick Palmucci: We purposely try to be 50 50 like that residential and non-residential, and. Yeah, we’re feeling the confidence, the lack of confidence on the residential side, right? People are discretionary money and repair maintenance versus, I’m gonna redo my kitchen and, and, and bathroom. It’s felt right now. And, and you kind of see it there.

[00:40:16] Nick Palmucci: 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, uh. I agree it can, it’s not always, I think a direct correlation.

[00:40:38] Nick Palmucci: ’cause there are things that can be driving the economy that aren’t just retail. And so,

[00:40:43] Scott W. Luton: yeah. Well said Nick. Man, let’s take a look ahead. Right. That consumer confidence thing, um, that was a measure in January. That’s certainly a, a forward looking. Measure for the rest of the first quarter perhaps. Uh, home sales.

[00:40:56] Scott W. Luton: Saw some interesting data come in for January as well. Some, some, uh, disappointing data. Usually we look at construction activity as well. Nick had a great comment around data centers built out. I, I think there’s 3000. Data centers under construction are currently planned right now. Just in the us. Just in the us.

[00:41:16] Scott W. Luton: And then think, that’s

[00:41:16] Karin Bursa: the same number I heard. Yeah.

[00:41:17] Scott W. Luton: Is it?

[00:41:18] Karin Bursa: It’s huge. It’s huge.

[00:41:19] Scott W. Luton: 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 wanna circle back on your crystal ball for the domestic freight market and what we may see in the months to come.

[00:41:35] Scott W. Luton: Nick, what would be some of your thoughts there?

[00:41:36] Nick Palmucci: 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, right? We gotta be optimistic, all that. I do believe we’re in the ninth inning of the freight recession, not booming, but I don’t think it’s gonna be this free fall.

[00:41:51] Nick Palmucci: 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, lock in those rates in 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.

[00:42:20] Nick Palmucci: 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, uh, I hope, ’cause that means volume’s up and. And the economy’s doing good from that standpoint,

[00:42:38] Scott W. Luton: Nick.

[00:42:38] Scott W. Luton: I like it. I like it. Karin, what’s your fearless prediction?

[00:42:43] Karin Bursa: Yeah. I, I, I like that insight. I like that comparison, Nick. I think that’s, that’s a great way to, uh, to look at capacity overall. What I would encourage, um, 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?

[00:43:03] Karin Bursa: 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.

[00:43:16] Scott W. Luton: Yes.

[00:43:16] Nick Palmucci: You find out who your friends were during COVID. Yeah,

[00:43:18] Karin Bursa: that’s for sure. Yeah. I Amen.

[00:43:21] Scott W. Luton: It’s so true. And, and you know, that was a big, it always seems to be a theme when I go out to conferences out there because you, we use conferences as a way to invest in the relationships that we work with and, and trade with and do business with. You know, relationships matter so much. It’s so obvious to many folks, but I’m very grateful for the reminders we get in a wide variety of ways.

[00:43:42] Scott W. Luton: So, Nick, Karin, and Bobby, I wish we had another hour ’cause I think we need to put this freight market on a couch and psychoanalyze it a bit more. Uh Right. But Bobby, for starters, we’re about to get Karin Bursa’s patented key takeaway, Bobby, let’s make sure folks know how to find the freight payment index out there and how to subscribe to it.

[00:44:01] Scott W. Luton: What would be your advice there?

[00:44:02] Bobby Holland: Go to freight.usbank.com and sign up. It’s a email subscription, no cost. Just, uh, trade us a little bit of information about who you are and it’ll come to your inbox quarterly,

[00:44:14] Scott W. Luton: man, what a deal. What a deal. And again, we’re making it really easy. We’re dropping the link right there.

[00:44:19] Scott W. Luton: You can check that out. Alright, so Nick, how can our audience learn more about all the cool things that Ferguson Enterprises is up to?

[00:44:28] Nick Palmucci: So if they wanna learn about Ferguson, you can go to our website, corporate.ferguson.com. We’ve got 700 1700 locations. We’re in every state. We’re in Canada, so I’m pretty sure somebody can find one. Ferguson.com if you would like to purchase some stuff.

[00:44:43] Nick Palmucci: And then also we have Ferguson Home, so. Mrs. Bucci likes to visit there often. Uh, new, uh, kitchen, bathroom and lighting. They’re absolutely gorgeous. So, uh, highly recommend. And if you do need a new icemaker, that’s a great place to start. ’cause we, we sell a lot of appliances. Very nice appliances.

[00:45:03] Karin Bursa: Very nice appliances.

[00:45:05] Scott W. Luton: Nick, I’ve be coming to you for a quieter refrigerator suit. Who knows? But Ferguson. Dot com drop link right there. And Nick really have enjoyed your perspective, of course, Bobby’s perspective. But Karin, 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?

[00:45:28] Karin Bursa: 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, and good data sources. Uh, 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 team 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.

[00:45:58] Karin Bursa: 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, 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.

[00:46:24] Karin Bursa: 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.

[00:46:37] Scott W. Luton: Well said, well said Karin 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’ve got the hyperlink right there.

[00:46:50] Scott W. Luton: I’ll tell you what, this was a wonderful discussion. I’ve got my 17 pages of notes right here. I wanna 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.

[00:47:12] Scott W. Luton: That’s remarkable. Bobby,

[00:47:14] Bobby Holland: what He needs to see me to get the measurements.

[00:47:18] Scott W. Luton: Uh, I love your sense of humor too, Bobby. All right, Nick Palmucci, senior Director of Supply Chain at Ferguson Enterprises, Nick, outstanding discussion, really enjoyed your perspective.

[00:47:28] Nick Palmucci: Yeah. Thanks for having me. This was fun.

[00:47:30] Scott W. Luton: It was.

[00:47:31] Scott W. Luton: It was. I feel smarter from the three of y’all. And Karin Bursa has always enjoyed your perspective here and look forward to our next show together. I

[00:47:39] Karin Bursa: looking forward to it and enjoyed the conversation today. Thanks for bringing all of the information to the table guys. We really appreciate it.

[00:47:46] Scott W. Luton: We sure do appreciate the

[00:47:46] Bobby Holland: discussion.

[00:47:47] Scott W. Luton: So Bobby and Nick and Karin, thanks again. Uh, to all of y’all folks, you got homework. Karin and Nick and Bobby really brought as we as promised some actionable perspective here today. Data driven and market driven. You gotta take one thing. And put it in action. Share it with your team. Y’all know that deeds not words is how we all can make for a much more successful 2026 and beyond.

[00:48:08] Scott W. Luton: So with all that said, on behalf of the whole team here at Supply Chain Now, Scott Luton challenging you, do good. Give forward. Be the change that’s needed. We’ll see you next time. Right back here on Supply Chain Now. Thanks everybody.

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