The American Trucking Associations (ATA) for-hire truck tonnage index contracted 0.3% in October, following a revised 6.3% drop during September though year-to-date tonnage is up 2.5% overall compared to the same stretch in 2015.
Yet Bob Costello, ATA’s chief economist, expressed confidence in a statement that the industry should be near the bottom of the current tonnage cycle
“There are some recent trends that suggest truck freight should improve, albeit gradually, soon,” he said. “Retail sales, housing starts, and even factory output all improved in October, which is a good sign.”
Lindsey Piegza, chief economist with Stifel Fixed Income, echoed that sentiment in her analysis of the 2% jump in existing home sales that occurred in October – a jump that was significantly larger than expected, creating the highest “unit pace” for existing home sales since early 2007.
“Somewhat indicative of pent-up demand throughout a relatively stagnant summer market, home sales appear to be benefiting at least short-term from the threat of rising rates,” she explained in a statement.
ATA’s Costello added that, more importantly for truckers, there has been considerable progress made in clearing out excess inventory stocks throughout the supply chain.
“While that correction is still ongoing, there has been enough improvement that the negative drag on tonnage shouldn’t be as large going forward,” he said.