April truck tonnage declines, reports ATA

Truck tonnage was down across the board in April, according to data issued by the American Trucking Associations (ATA) this week.

Seasonally-adjusted (SA) for-hire truck tonnage at 134 (2000=100) dropped 2.5% (its largest monthly contraction year-to-date), following declines of 1.1% in March and 0.1% in February. On an annual basis, the SA was down 1.8%, following a 0.6% annual increase in March, and April was well short of the all-time high for the SA of 142.7 in February 2016.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment and the metric ATA says fleets should benchmark their levels with, came in at 132.6 in April, a 7.8% decline compared to March’s 143.8, but was ahead of February’s 125.5. Going back to each April since 2000, the average NSA decline has been 3.6%, with this April seeing a much more significant drop.

As defined by the ATA, the NSA index is assembled by adding up all the monthly tonnage data reported by the survey respondents (ATA member carriers) for the latest two months. Then a monthly percent change is calculated and then applied to the index number for the first month.

“I have to admit that April’s contraction is a bit surprising, especially considering the anecdotal reports I’ve been hearing from fleets regarding freight levels,” said ATA Chief Economist Bob Costello in a statement. “It’s not necessarily that tonnage levels fell in April that is surprising, but the size of the decrease. One explanation is that housing starts fell substantially in April as well, and residential construction generates heavier truck freight. Despite the fact that tonnage is down a total of 3.6% over the last three months, I still expect moderate growth going forward as key sectors of the economy continue to improve slowly.”

Some of these key sectors, which have been previously outlined by Costello, include things like lower inventory levels, better manufacturing activity, solid housing starts, good consumer spending, as well as an increase in the oil rig count – all of which are drivers of freight volumes.

Should the inventory issues truly continue to recede, it will go a long way in helping volume growth, especially if it runs in tandem with ongoing job growth, and the semblance of sustained gains in retail sales and consumer confidence, too.

ATA’s Costello explained in video accompanying the organization’s data that it is hard to pinpoint why tonnage dropped in April, considering that anecdotal reports indicated freight flows were getting better.

“Things don’t always match up exactly with what you hear with anecdotal reports…but one of the things that did happen was strong housing starts were down 2.6 percent, which generates a lot of heavy freight, and may have helped with [tonnage] down,” he said. “