The American Trucking Assns. (ATA) seasonally adjusted For-Hire Truck Tonnage Index fell 3.3% in March, the largest month-to-month contraction since August 2006, the trucking lobby said.
According to ATA, the seasonally adjusted tonnage index was at its lowest level since November 2007, and contracted 0.2% compared to March 2007, the first year-over-year decrease since October 2007. The seasonally adjusted tonnage index remained unchanged in February.
The index is based on surveys from ATA’s membership and is a preliminary figure subject to change, the group said.
“I’ve been concerned that the recent run-up in tonnage might not be sustainable, and clearly March’s figures confirmed that apprehension,” said ATA chief economist Bob Costello.
Costello added that the latest reading was significant. He had previously forecast a mild recession for the overall economy for the first half of the year, but the March tonnage drop suggested it might be more severe than previously thought.
“Truck tonnage often leads both recoveries and recessions, and the latest contraction suggests the economy and trucking are not out of the woods yet,” Costello said. “Surging diesel and gasoline prices are weighing heavily on consumers, and since trucks haul virtually all consumer goods at some point in the supply chain, the industry is going to be significantly impacted both directly through higher diesel prices and indirectly through lower freight volumes.”
Chris Brady, president of Commercial Motor Vehicle Consulting, told FleetOwner that economic data has shown that tonnage has been soft, carriers’ profit margins are decreasing and industrial production is down slightly, but things still aren’t as bad as some reports speculate.
“Freight is generally flat to down, but if we’re in the middle of a recession now, we’d expect to see freight worse off than it currently is,” Brady said. “Some sectors of the economy are doing well, and inventory isn’t too high. The largest problem for carriers is still fuel.”
“The biggest influence on freight is consumer spending, and the largest imbalances are in the household sector,” Brady added. “I don’t look for any improvement in the second quarter from the first quarter—flat overall with some sectors up and some down.”