July tonnage is up annually, reports ATA

Trucking volumes continue to remain largely flat, according to data released by the American Trucking Associations (ATA) earlier today. 

Seasonally-adjusted (SA) truck tonnage in July fell 0.4 percent following a 0.1 percent gain in June, representing the first SA decrease since April. July’s SA reading was 125.4 (2000=100) compared to June’s 125.9, which ATA said is the highest in its history. On an annual basis, July’s SA is up 4.7 percent and stands as the lowest annual gain going back to April. And on a year-to-date basis, the SA is also up 4.7 percent.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, increased 3 percent from 125.9 in June to 129.6 in July. 

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.

“After gaining a total of 2.2% in May and June, it isn’t surprising that tonnage slipped a little in July,” ATA Chief Economist Bob Costello said in a statement. “The decrease corresponds with the small decline in manufacturing output during July reported by the Federal Reserve last week. Despite the small reprieve in July, we expect solid tonnage numbers during the second half of the year as sectors that generate heavy freight, like oil and gas and autos, continue with robust growth,” Costello said.

He added that home construction generates a significant amount of tonnage, but as mortgage rates and home prices rise, growth in housing starts will decelerate slightly in the second half of the year, but still be a positive for truck freight volumes. What’s more, he said tonnage gains in the second half of the year are likely to overstate the strength in the economy as these heavy freight sectors continue to outperform the economy overall.

That latter point rings especially true, given that retail sales remain sluggish, coupled with still relatively high unemployment and a cautious consumer outlook.

In the most recent edition of the Cass Freight Index, Rosalyn Wilson, senior business analyst at the Delcan Corporation, noted that the economy is still showing signs of slow growth, with GDP growth for the second quarter estimated to be 1.7 percent, stronger than the first quarter revised growth rate of 1.1 percent.

“Future prospects from a freight point of view look largely the same as they did last
Month,” she wrote. “Volume is strong enough to make use of the equipment we have deployed, but not growing at a rate sufficient to cause stress in the system.”

Shippers and carriers have told LM in recent months that current trends remain intact in terms of volume and available capacity, with the general expectation being that it will remain the case barring a sudden shift in demand patterns or economic activity.