Guide to Warehousing and Industrial Real Estate

Special Report

US merchant wholesale data shows some green shoots for freight demand

By Jason Miller

Each month , merchant wholesalers — defined as entities that buy and sell goods from their own account , primarily to other business — sell more than $ 650 billion of goods and services in the United States , exceeding the sales of retailers and the value of shipments of manufacturers .

Recent academic research highlights the growing importance of wholesalers for the delivery of manufactured goods . In 1997 , wholesalers accounted for 31.9 % of the US manufactured goods market , and by 2012 , this figure had risen to 47.4 %.

A subset of wholesalers known as factory-less goods producers , such as Apple , have a disproportionate impact on US imports .

Consequently , examining the dynamics of both inflation-adjusted sales as well as the ratio of inventories-to-sales for merchant wholesalers can help inform expectations about freight demand .

Examining detailed monthly data for different subsectors of merchant wholesaling paints a complex picture for freight demand in 2024 , with some sectors showing strength but others showing weakness .

Signs of improvement

Furniture wholesalers saw a strong rebound in sales toward the end of 2023 , with inflation-adjusted sales for December 2023 exceeding December 2022 by 3.2 %. The sharp decline in those wholesalers ’ ratio of inventoriesto-sales over the past few months may point to strongerthan-expected demand . As furniture imports are the single-largest category of products brought into the US in containers on a weight basis , this may point to a rebound in furniture imports in 2024 , especially if single-family housing starts to maintain the seasonally adjusted upward momentum it exhibited in the fourth quarter of 2023 .

Wholesalers of miscellaneous durable goods such as toys and sporting goods saw a sharp increase in inflation-adjusted sales in the fourth quarter , especially December , accompanied by a sharp drop in its inventories-to-sales ratio , again pointing to demand likely improving more than anticipated .

Wholesalers of paper , a key US containerized export , have finally started to see an increase in inflation-adjusted sales after transactions fell 15 % by mid-2023 from early 2022 highs . This could point toward some recovery in the US paper manufacturing industry , one of the top contributors to dry-van truckload demand , which has seen its production decline more than 10 % from early 2022 highs .

Furniture , toy , paper and chemical wholesalers all report declining inventory-tosales ratios in early 2024 . Shutterstock . com

14 Journal of Commerce | March 25 , 2024 www . joc . com