That truck tonnage retreated last month is apparently not a cause for concern. The American Trucking Assns.’s (ATA) advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index slid back 4.0% in January—that after jumping 6.4% in December. This contraction puts the SA index at 119.4 (with 2000=100), which is down sharply from December’s record level of 124.4.
“Last month I said I was surprised by the size of the gain in December,” said ATA chief economist Bob Costello. “ Today, I’m not surprised that tonnage fell on a seasonally adjusted basis in January simply due to the fact that December was so strong,”
He noted that the strong December showing marked the largest month-to-month gain since January 2005.
“I’m still optimistic about truck tonnage going forward,” he added. “In fact, while many fleets said January was normal, they are also saying that February has been pretty good so far.”
Reacting to the ATA tonnage dip, analyst Peter Nesvold of Jefferies & Co. contends that the January contraction was to be expected. “The current trends in tonnage closely resemble a ‘typical’ truck cycle,” he stated. “We compared this current tonnage cycle to our truck composite model, which aggregates truck tonnage data over the past 40 years, and we found that this tonnage cycle has been unremarkable in a historical context.
“Based on how devastating the ‘Great Recession’ was,” he continued, “we expected to see huge swings in truck tonnage relative to the ‘typical’ tonnage cycle. What we found, however, is that this tonnage cycle has been in line with historical trends. Furthermore, the current truck cycle is 96% correlated with our truck composite model.”
Nesvold went on to point out another key tonnage indicator was far more positive. “The Cass Freight Shipments Index was up 3.6% YoY in January,” he explained. “Cass Information Systems processes over $17.5 billion in freight invoices each year. The Freight Shipments Index is based on Cass’ diverse customer base, which includes 1,200 divisions of 400 unique companies. The Freight Shipments Index, which is one of the many freight indicators that we track, reflects shipments by various modes of freight transportation, including trucking, rail and air.
“The Cass index,” he continued, “climbed 3.6% YoY in January, following a 0.7% YoY uptick in December. Additionally, the index currently stands at an eleven-month low of 1.046 (January 1990=1.0), down 0.9% from December’s level. We believe that the continued softness in the Cass index is reflecting the overall slowdown in airfreight (and to a lesser extent ocean) volumes.”
ATA also related this week that it recently revised its seasonally adjusted index back five years as part of its annual revision. The upshot: For all of 2011, tonnage rose 5.8% - or slightly lower than the 5.9% previously reported by ATA - and it matched 2010’s gain of the same magnitude. The index increased 3.6% from January 2011, ATA noted.
The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 112.1 in January, which was 3.5% below the previous month, stated ATA.
ATA said it calculates its tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 10th day of the month. The report includes month-to-month and year-over-year results, relevant economic comparisons and key financial indicators, said ATA.
