Truck tonnage is mixed in January, reports ATA

Data issued earlier this week by the American Trucking Associations (ATA) showed mixed results for truck tonnage for the month of January.

Seasonally-adjusted (SA) for-hire truck tonnage in January at 138.8 (2000=100) was up 2.9 percent compared to December and up 2.6 percent annually. The annual gain was ahead of a 0.2 percent annual December decline, and the January SA was down 8.9 percent compared to February 2016’s all-time high of 142.7. 

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, came in at 131.6 in January, a 1.8 percent decline compared to December.  The January NSA was up 3.4 percent annually compared to January 2016’s 127.1.

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.

“The freight economy is starting to show some signs of life and January’s truck tonnage numbers are a good step forward,” said ATA Chief Economist Bob Costello. “Hopefully the ups and downs in truck tonnage during 2016 will not be as pronounced in 2017. Looking ahead, the most recent positive sign for truck tonnage is the large drop in the inventory-to-sales ratio during December. The decrease put inventories throughout the supply chain, relative to sales, to the lowest level in two years. There is no doubt that the inventory glut was a drag on truck freight volumes last year.”

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.

“The inventory glut appears to have waned as a retarding influence on volumes,” wrote Stifel analyst John Larkin in a research note. “While the overall inventory to sales ratio has favorably declined in recent quarters, the ratio still has a long way to go to match previous lows. Previous lows may now be the wrong target to use given the need for omni-channel and e-commerce retailers to offer rapid order fulfillment options. Simply put, more overall inventory is required if all inventory items are forward positioned in order to facilitate that very rapid fulfillment demand.”