April tonnage data from the ATA shows mixed results

The stop and start nature of the current freight economy and economic recovery was exemplified in today’s April truck tonnage data report by the American Trucking Associations (ATA).

Seasonally-adjusted (SA) truck tonnage in April fell 1.1 percent, following a revised 0.6 percent (originally 0.2 percent) gain in March. The February and January SA’s were up 0.5 percent and down 6.4 percent, respectively. April’s SA reading was 118.7 (2000=100). Compared to April 2011, the SA was up 3.5 percent, topping March’s 3.1 percent annual improvement. And on a year-to-date basis, the ATA said the SA was up 3.8 percent through the first four months of the year.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, dipped 5.5 percent from March to April, with the NSA coming in at 116.9. It was 3.3 percent better than April 2011’s 113.6.

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.

“While April’s decrease was a little disappointing, the March gain turned out to be stronger than originally thought,” ATA Chief Economist Bob Costello said in a statement. “The ups and downs so far this year are similar to other economic indicators. While just one month, the April’s decrease also matches with an economy that is likely to grow slightly slower in the second quarter than in the first quarter. I continue to expect tonnage to moderate from the pace over the last two years. Annualized growth in the 3 percent to 3.9 percent range seems more likely.”

Truck tonnage grew at an annualized rate of 5.8 percent in both 2010 and 2011, according to ATA data.

As previously reported, carriers continue to tell LM that demand and tonnage remain fairly decent, especially when taking the slowly recovering economy and seasonality components into account as well.

What’s more, various anecdotal reports are suggesting that the second half of 2012 will be better than it has been in past years, due to a potential uptick in import growth spurred by back-to-school shopping. Other possibilities for potential growth include fairly strong consumer confidence noted in monthly retail sales, as well as strong domestic manufacturing output.

But a research note from Wolfe Trahan analyst Ed Wolfe quelled that sentiment somewhat, citing an anecdotal comment from a paper products shipper, which noted
“solid volume trends early this year benefited from mild winter weather, which likely masked what he believes is a sluggish economy.”

The freight economy continues to remain in a “teeter-totter”-like state, explained Mike Regan, president of TranzAct Technologies and LM blogger, in a recent interview.

“On one end, businesses are doing well in terms of reporting profitability and managing costs,” he said, “and on the other hand are carriers who are exercising uncommon discipline in terms of managing capacity.”

Regan said this development is stunning in the sense that while many indicators point to volumes coming back, they are still not close to 2007 levels. And if there were more confidence by carriers in the ability to grow long-term, it would be easier for carriers to move forward and build capacity, which is not happening.