Trucking news: ATA reports that its For-Hire Truck Tonnage index is down 2.2 percent
Jeff Berman, Group News Editor -- Logistics Management, 5/27/2009
ARLINGTON, Va.—In another sign that the economy still has a ways to go before it fully recovers, the American Trucking Associations reported this week that its tonnage index was down again in April for the second consecutive month.

The ATA said that its advanced seasonally adjusted For-Hire Truck Tonnage Index was down 2.2 percent in April, following a 4.5 percent decline in March. This index started the year fairly strong, with a 4.5 percent cumulative gain in January and March.


The ATA’s seasonally -adjusted index equaled 99.2 (2000=100), which represents its lowest level since November 2001. March’s index was also dismal at 101.4, which at that time was the lowest level it had seen since March 2002.


And its not seasonally adjusted (NSA) index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, was down 2.9 percent from March at 101.6. The ATA’s not seasonally adjusted index in March was up 10.2 percent over February at 104.7, indicating that fleets reported higher volumes in January. But ATA officials said that this gain falls short of the typical 15-20 percent increase that typically occurs from February to March.


Another sign that tonnage levels remain depressed is that tonnage contracted 13.2 percent year-over-year in April, representing the worst year-over-year decrease of the current cycle and the largest drop in 13 years, according to the ATA. This comes on the heels of a 12.2 percent annual contraction from March 2009 to March 2008.


Bob Costello, ATA Chief Economist, said truck tonnage is being impacted by the recession and the massive inventory correction that the supply chain is currently undergoing.


“While most key economic indictors are decreasing at a slower rate, the year-over-year contractions in truck tonnage accelerated because businesses are right-sizing their inventories, which means fewer truck shipments,” Costello said. “The absolute dollar value of inventories has fallen, but sales have decreased as much or more, which means that inventories are still too high for the current level of sales. Until this correction is complete, freight will be tough for motor carriers.” Costello added that truck freight has yet to hit bottom and it could be a few more months before this occurs.


Similar views and observations were heard during April’s National Shippers Strategic Council (NASSTRAC) annual conference in Orlando, Fla., with trucking executives telling LM that business conditions and volumes started to appear “less worse” in recent weeks, but there is still ways to go before a full recovery is seen.


Last month, Stephens Inc. Managing Director Thom Albrecht wrote in a research note that despite a few inferences that freight volumes are seeing moderating declines and/or even establishing a floor, nothing suggests any sort of measurable recovery. And even though tonnage has seen gains in recent months Albrecht pointed out tonnage has not seen these current low levels since September 2003.


Albrecht told LM in an interview that he focuses on the not seasonally adjusted index on a year-over-year basis for an “apples-to-apples” comparison.


“This is what the actual truckers feel out there,” he said. “I’m not a big fan of seasonally adjusted data.”


Trucking serves as a barometer of the U.S. economy, because it represents nearly 70 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. The ATA notes that it hauled 10.2 billion tons of freight in 2008, and that motor carriers collected $660.3 billion—or 83.1 percent—of total revenue earned by all transport modes.