That the American Trucking Assns. (ATA) seasonally adjusted For-Hire Truck Tonnage Index has slipped again is just par for the course as the freight market paces an economy that is recovering albeit sluggishly.
The index dipped 0.2% for October, after decreasing by 0.3% for September. The latest decline lowered the seasonally adjusted (SA) index to 103.6 (2000=100) from the revised 103.8 in September. The not seasonally adjusted index, which represents the change in tonnage actually hauled before any seasonal adjustment, equaled 109.6 in October, up 1.6 % from September, said ATA. Compared with October 2008, SA tonnage fell 5.2 %, which was the best year-over-year showing since November 2008, noted ATA, while in September, the index was down 7.3% from a year earlier.
ATA chief economist Bob Costello said the latest freight reading “reflects an economic recovery that is still trying to gain balance,” even though it’s on more solid ground than a year ago. “Repeating what I said last month, the trucking industry should not be alarmed by the small decreases in September and October,” Costello said. “The economy is behaving as expected, with starts and stops. This is being reflected in truck tonnage, as well as most economic indicators.”
Analyst Eric Starks, president of FTR Associates, told FleetOwner he agrees with Costello’s assessment of the start-and-stop recovery and its impact on truck freight. “Now that freight has reached a bottom, over the next three to six months,” Starks advised, “the [tonnage] numbers will look rosier than they really are if they are compared to year-over-year figures. We’ll keep seeing ups and downs—it will be an uneven recovery in freight over the next six months. “
Starks said its key to “look for the overall trend” and suggested this may be done by looking at three-month averages instead of the month-by-month performance of the freight market. “There’s the risk of false optimism if things look good for one month—really you need to study the longer term. Remember, the expectation has been for freight to come back slowly, and the data indicates that is what it happening.”
Costello also pointed out that trucking “should remain prepared for ups and downs in the months ahead,” but that he sees a general trend toward modest improvement. “Since consumer spending and manufacturing are not surging, trucking shouldn’t expect robust growth either,” he said. “However, both retail sales and manufacturing output are exhibiting mild upward trend lines, which is the path I expect truck freight to take.”
“We are expecting that by the late first or early in the second quarter that we should see some modest movement upwards [in freight levels],” added Starks. “We’re looking for confirmation of that at this point [going forward].”