ATA seasonally-adjusted truck tonnage index up in July

Following two consecutive months of declines, the American Trucking Associations (ATA) said that its advance seasonally-adjusted (SA) For-Hire Truck Tonnage index was up 1.5 percent in July.

This is the seventh time in the past ten recorded months that the SA has increased. And it follows a revised 0.1 (from 0.6) percent decline in May and a revised 1.6 percent (from 1.4) percent decline in June. July’s SA index was 110 (2000=100) compared to 108.3 in July.

And with the SA up on a sequential basis for the first time in three months, the ATA said that the July SA was up 7.4 percent year-over-year for the eight straight monthly annual gain, albeit these comparisons are up against a challenging 2009. The 7.4 percent year-over-year uptick is in line with 7.7 and 7.6 bumps in May and June, respectively.

The ATA also reported that its not seasonally-adjusted index (NSA), which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, fell to 109.9 in July for a 5 percent decline from June. This drop-off in the NSA halts the sequential NSA gains seen in May and June and somewhat quells the momentum of a steadily-recovering market, which had been evidenced to a degree over the majority of the first half of 2010.

Some industry analysts maintain that the not seasonally-adjusted index is more useful, because it is comprised of what truckers haul. As defined by the ATA, the not seasonally-adjusted 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.

Earlier this summer, many shippers, carriers and analysts told LM they were optimistic about the trucking market, especially when comparing it to 2009. But since then there have been various economic reports, including today’s durable goods orders report from the Department of Commerce, which noted orders were less than anticipated in July, with a 0.3 percent gain along with another Commerce report that indicated new home sales in July to an annual level of 276,000—the lowest level since data was first collected in the early 1960s.

Other signs of a slowing economy are also evident, with unemployment still high, retail sales down, and consumer confidence falling. These factors all have the potential to bring tonnage growth down in the coming months.

“The economy is slowing and truck freight tonnage has essentially gone sideways since April 2010,” said ATA Chief Economist Bob Costello in a statement. “After accounting for the reduction in supply over the last few years, even small gains in tonnage will have a larger impact on the industry than in the past.”

Another factor impacting trucking volumes is tight capacity. Last month, Costello said with trucking capacity remaining tight because of trucking market supply tightness, tonnage growth for fleets feels better than expected.

Despite the myriad challenges in the trucking market, an executive at a large carrier company told LM that demand at his company continues to hold up relatively well.

“Shippers are clearly interested in securing capacity,” said the executive. “They’re taking steps to ensure they have the resources they need from their key carriers, particularly as we approach the higher-volume seasonal shipping months.” 

Trucking serves as a barometer of the U.S. economy, because it represents 68 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 8.8 billion tons of freight in 2009, and that motor carriers collected $544.4 billion-or 81.9 percent-of total revenue earned by all transport modes.