April trucking tonnage is solid, reports American Trucking Associations

Truck tonnage volumes were strong in April, according to data issued today by the American Trucking Associations (ATA).

The ATA’s advanced seasonally-adjusted (SA) For-Hire Truck Tonnage Index for April, at 121.8 (2015=100) headed up 7.4% on the heels of a 2% decline in March, which came in at 113.4.

Compared to April 2018, SA tonnage saw a 7.7% annual gain, which represents its largest annual increase since July 2018.  

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, was 117.7 (2015=100) in April, topping March by 1%.

“The surge in truck tonnage in April is obviously good for trucking, but it is important to examine it in the context of the broader economy,” said ATA Chief Economist Bob Costello in a statement. “February and March were particularly weak months, as evidenced by the 3.5% dip in tonnage due to weather and other factors, so some of the gain was a catch-up effect. In addition, the Easter holiday was later than usual, likely pushing freight that would ordinarily be moved in March into April. I do not think the fundamentals underlying truck tonnage are as strong as April’s figure would indicate, but this may signal that any fears of a looming freight recession may have been overblown.”

Looking at the state of the freight economy at the RILA Link 2019 Supply Chain Conference earlier this year, Costello said that people need to set their expectations differently for 2019 when compared to a very good 2018, in that the economy will grow, albeit at a slower rate.

While GDP may not meet 2018’s strong robust levels, Costello made it clear that key economic fundamentals remain firmly intact.

These fundamentals include things like still strong consumer activity, as well as a solid job market.

Addressing the latter, he said that there are currently more job openings than there are unemployed people, which “does not usually happen.” What’s more, he raised the question of what happens when full employment is reached, as it relates to wages. And the short answer was that wages go up, which obviously continues to support economic growth and freight activity.

“Last year, we were at the height of the cycle with wage growth of 3% and consumers continuing to spend on goods…it will likely slow down a bit but the fundamentals remain good,” he said.

On the other end, though, are housing starts, which Costello labeled a disappointment, even though there 2018 represented the best year for housing starts since 2007, with recent months showing a flatness in the market.

Costello attributed the recent slump to a combination of some supply issues, coupled with mortgage rates rising. Housing issues, at the moment, aside, Costello said factory output remains strong, up 2% in 2018, with a bullish future outlook.

“This all leads to a growing economy and a growing trucking sector, too, but not quite as strong as 2018,” explained Costello.