Tonnage stays flat for September

Tonnage stays flat for September

TL tonnage numbers tracked by the American Trucking Associations (ATA) stayed flat for the month of September, largely as falling retail sales cancelled out freight gains from higher factory output.

The group’s for-hire truck tonnage index didn’t budge in September, following a gain of 1.6% in August. Compared with September 2013, the index increased 3.7%, which is down from August’s 4.5% year-over-year gain.

Year-to-date, compared with the same period last year, tonnage is up 3.2%, the ATA reported.

“September data was a mixed bag, with retail sales falling while factory output increased nicely,” noted ATA Chief Economist Bob Costello. “As a result, I’m not too surprised that truck tonnage split both of those readings and remained unchanged.”

Lindsey Piegza, chief economist for Sterne Agee, also noted that the Dept. of Labor’s producer price index (PPI) fell 0.1% in September – the first negative monthly report since August 2013 – with retail sales falling 0.3% in September, the first monthly decline since the start of the year.

On an annual basis, though, Piegza pointed out that retail sales are up 4.3% and 3.9% on a three-month annualized basis. However, that’s down from a 5.2% pace reported in August and even further below a 7% pace at the start of the third quarter.

ATA’s Costello stressed, though, such metrics aren’t affecting trucking’s tonnage trend lines too much. For example, he said that during the third quarter, truck tonnage jumped 2.4% from the second quarter and surged 4% compared to the third quarter in 2013, with this year’s third quarter truck tonnage average the highest on record.

Sterne Agee’s Piegza also added that housing starts are continuing to increase – important activity as it generates freight for trucks to haul.

“Building permits rose 1.5% from just under 1 million to 1.018 million in September,” she said.

“And housing starts rose 6.3% in September after a 12.8% decline the month prior, taking the annual rate from 957,000 to 1.017 million” though Piegza stressed such “uneven demand” is likely to keep home builders cautious for some time, despite the fact that industry confidence is on the rise thanks to relative improvement in conditions compared to weakness at the start of the year.

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