Freight Tonnage Drops in July

By: Classadrivers.com

For the first time since April, the amount of moved freight dropped 0.4% in July. Moved freight had climbed 0.4% higher in June.

The American Trucking Association (ATA) says the decrease is related to the decline in manufacturing output during July, as reported by the Federal Reserve.

The advanced seasonal For-Hire Truck Tonnage Index registered 125.4 for the month of July compared to 125.9 in June, the highest level ever. Year-to date, the index is up 4.7%, but is still the lowest year-over-year gain since April.

Climbing 3%, the not seasonally adjusted index equaled 129.6 compared to 125.9 in June. This index represents the change in freight size actually moved by the fleets before any seasonal adjustments.

Due to zones that generate heavy freight such as cars, gas and oil, the ATA expects solid tonnage numbers during the second half of the year.

However, retail freight could slip. Most U.S. retailers have lowered their sales expectations due to the reduction in consumer spending. Wal-Mart executives recently cut their projection by 50% based on what they’ve seen thus far this year.

However, The ATA does not see this having a large impact on the tonnage numbers, due to the fact that a retail shipment typically weighs significantly less than auto, energy or housing parts.

The ATA's claim that the second half of the year will be strong is supported by a recent report written by the transportation industry analyst Brad Delco and research associate Ben Hernsberger from Little Rock based Stephens Inc.

They suggest that tonnage levels in the less-than-truckload sector of the trucking industry began to improve during the end of the second quarter and into the beginning of the third fiscal quarter. Numbers prove that carriers who were reporting negative tonnage in the first quarter were now reporting flat to positive tonnage in the months of June and July.

The Cass Freight Index also fell 2.3% in July, but the drop was associated with seasonal trends, according to Vienna, Virginia based Delcan Corp. Data comes from 350 large shippers including $22 billion in annual freight transactions to create the Index.

Shipment volume was up 3.4% for the year compared to the same period in 2012, and is expected to grow with the Gross Domestic Product.