Trucking news: ATA reports October truck volumes are down for second straight month
Jeff Berman, Group News Editor -- Logistics Management, 11/23/2009
ARLINGTON, Va.-Truck tonnage volumes were down 0.2 percent in October for the second straight month, following a 0.3 percent September decline, according to data released by the American Trucking Associations (ATA).
The ATA reported this decrease brought the ATA's seasonally adjusted (SA) For-Hire Truck Tonnage Index to 103.6 (2000=100), which closely trails September's 103.8 and August's 104.1. The SA has been down five of the last eight months.
On a year-over-year basis, the ATA said that SA tonnage was down 5.2 percent compared to October 20089, representing the best year-over-year output since November 2008. It also improved on a sequential basis, with September's SA index down 7.3 percent compared to September 2008.
While the SA has is down the last two months, it is only down a cumulative 0.5 percent. And with holiday shopping season officially here, carriers and shippers have been mildly optimistic that will translate into increased demand and higher tonnage totals in November and December. But with unemployment above 10 percent, credit remaining tight, and consumers being cautious, it is unclear how things will play out.
The ATA also reported that its not seasonally-adjusted index (NSA), which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 109.6 in October up from 107.9 in October. The NSA was off 7.2 percent from August 2008's 116.3 level, and it has been up sequentially in four of the last five months. The October 2008 NSA was 119.9.
As defined by the ATA, the not seasonally-adjusted index is assembled by adding up all the monthly tonnage data reported by the survey respondents (ATA member carriers) for the latest two months. Then a monthly percent change is calculated and then applied to the index number for the first month. Some industry analysts maintain that the not seasonally-adjusted index is more useful, because it is comprised of what truckers actually haul.
ATA Chief Economist Bob Costello said that the October tonnage numbers reflect an economic recovery that is still trying to gain balance, although it is 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 in a statement. "The economy is behaving as expected, with starts and stops. This is being reflected in truck tonnage, as well as most economic indicators. Since consumer spending and manufacturing are not surging, trucking shouldn't expect robust growth either. However, both retail sales and manufacturing output are exhibiting mild upward trend lines, which are the path I expect truck freight to take."
Costello also noted that the trucking industry should remain prepared for ups and downs in the months ahead, but the general trend should be modest improvement.
Even though shippers and carriers have noted they are feeling better about industry conditions and freight trends in recent months compared to earlier in the year when economic conditions were dismal. But as has been the case for more than a year, carriers say there is still too much capacity in the marketplace and not enough freight to chase, coupled with overall conditions remaining difficult.
The extra capacity situation was made clear on a Stifel Nicolaus conference call last week with Mike Regan, president and CEO of TranzAct Technologies. Regan said that trucking industry capacity could severely contract over the coming three years, adding that the combination of a delayed recovery, rising energy prices, tight credit, and new government regulations could drive significant capacity out of the trucking industry over the medium- to long-term future.
And a trucking industry executive recently told LM that these economic conditions continue to create some of the most imposing headwinds carriers have ever seen.
"Those carriers that can garner market share in this environment while protecting their balance sheets will prosper in the upturn, we all just wish that the upturn would get here sooner," the executive said.
Trucking serves as a barometer of the U.S. economy, because it represents nearly 70 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. The ATA notes that it hauled 10.2 billion tons of freight in 2008, and that motor carriers collected $660.3 billion-or 83.1 percent-of total revenue earned by all transport modes.
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