ATA September truck tonnage stays in familiar range

Trucking volumes, for the month of September, which were issued by the American Trucking Associations (ATA) today showed annual gains, albeit at different levels.

The ATA’s advanced seasonally-adjusted (SA) For-Hire Truck Tonnage Index for September, at 117.6 (2015=100), headed up 0.2% on the heels of a 4% (upwardly revised from 3.2%) August decline, which came in at 117.3. And on an annual basis, the September SA reading headed up 3.5% compared to September 2018. ATA officials pointed out that the organization’s tonnage data is “dominated by contract freight, which is performing significantly better than the plunge in spot market freight this year.”

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 114.8 (2015=100), which was off 7.5% compared to August’s 124.

“This was the first month in 2019 that we did not see a significant increase or decrease in tonnage,” said ATA Chief Economist Bob Costello in a statement. “For the entire third quarter, the index was up 1.2% over the previous quarter and 4.5% from a year earlier, both are nice gains.” 

Celadon CFO Thom Albrecht explained on a recent Webcast hosted by TranzAct Technologies, CSCMP, and NASSTRAC that up until around mid-2019, roughly 80%-to-85% of the things carriers had been experiencing was due to the infusion of supply and what he called a modest downtick in demand, with demand becoming more uncertain in recent months.

Signs of declining demand were evident in the most recent manufacturing data points issued by the Institute for Supply Management, which Albrecht said serves as a future gauge of freight production. ISM reported in early September that its key manufacturing reading, the PMI, was below 50 (a reading of 50 or higher indicates growth is occurring) for the first time since August 2016, with new orders, the most direct indicator of demand, negative for the first time since December 2015, snapping a 43-month stretch of growth.

“Supply was the biggest impact on the first half of the year, and it continues to be an overhang but more concerning has been the little bit of a drop-off in demand. Since mid summer that has been a little bit more pronounced and I blame that on Washington,” said Albrecht.

And Universal Logistics CEO Jeff Rogers said on the same Webcast that the changes in trucking, from 2018 to 2019, were unexpected, in the sense of how rapidly things have changed, noting how things have been softer than expected on the truckload side since the beginning of 2019 and never really came back.

What’s more, Rogers said that while current freight volumes are not “horrible,” they are OK but not as strong as what was expected either. And he was succinct in describing how current trends point to signs of a lack of a typical Peak Season for this time of year, too.

Robert W. Baird & Co. analyst Ben Hartford observed in a research note that trucking demand trends are still sluggish into October with contracts continuing to describe peak season expectations as more “muted” and certainly less robust than late 2018's tariff-fueled frenzy.

And on the spot market side, he noted that pricing data is still soft and consistent with weak truckload fundamentals throughout 2019.