Truck tonnage readings trended down, for the month of March, according to data issued today by the American Trucking Associations (ATA).
The ATA’s advanced Seasonally Adjusted (SA) For-Hire Truck Tonnage Index for March—at 106.8 (2015=100)—was off 5.1%, following a 2.3% February decline (revised from an initial reading of a 4.5% decline), following a 1.4% (upwardly revised from an original reading of 1.4%), from December to January, which came in at 115.2.
On an annual basis, March’s SA tonnage reading dropped 9.5%, which comes on the heels of a 3.8% annual decline in February. Both readings were steeper than January’s 1.6% annual decrease (downwardly revised from an original reading of a 2.1% decrease), with all of 2020 down 4% compared to 2019. ATA officials pointed out that its For-Hire Truck Tonnage Index “is dominated by contract freight as opposed to spot market freight.”
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 110.6 in March, topping February’s 101.6 by 8.9%.
“March’s drop comes as somewhat of a surprise,” said ATA Chief Economist Bob Costello in a statement. “I certainly heard from many fleets that the end-of-quarter rush was good, but early March was soft. Truck freight volumes were also negatively impacted by supply chain issues from the lack of microchips and other inputs. That said, this surprise to the downside does not change my positive outlook going forward. Household spending power is strong and I believe there is plenty of pent-up demand for consumer spending. Single-family home construction and stronger manufacturing output, even with the supply chain issues, will help support tonnage through this year and beyond.”
In a recent interview with LM, Costello explained that the ongoing impact of the COVID-19 pandemic, especially early on, had a major impact on the trucking market, with a major rush on certain consumer staples like food and paper products prior to conditions plummeting around May 2020.
But by the middle of 2020 and into the fall he said conditions saw material improvements, due to things like increased e-commerce activity and people buying more goods than services.
“E-commerce is a big part of that,” he said. “And certain parts of trucking are up still despite the pandemic and is really related to the buying of consumer goods…certainly around e-commerce. Some of the freight volumes around single-family housing starts is strong, too. Temperature-controlled volumes related to restaurants is still off but related to grocery stores is way up. It has been unusual in that there have been different outcomes depending on which type of supply chains you are in and what type of freight you are hauling.”
Robert W. Baird & Co. analyst Garrett Holland wrote in a recent research note that key freight demand indicators have reaccelerated in recent weeks and should benefit from additional fiscal stimulus.
“Inventory restocking also remains a tailwind that likely carries through 2021,” he wrote. “Supply growth remains the biggest wildcard, highlighted by elevated Class 8 orders, yet production challenges and driver availability remain key constraints.”