ATA reports gains in May truck tonnage volumes

The American Trucking Associations (ATA) reported today that truck tonnage for the month of May saw gains, while cautioning that these gains were fairly minimal.

Seasonally-adjusted (SA) for-hire truck tonnage in May headed up 1.8 percent at 132.1 (2000=100), which was nearly a full percentage point below April’s 2.7 percent gain, as well as being the smallest annual gain going back to February 2013. On a year-to-date basis through May, ATA said SA tonnage is up 3.7 percent annually.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment came was 133.1 in May, topping April by 0.3 percent. On an annual basis, May NSA volume was essentially flat.

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.

“The good news is that truck tonnage increased in May,” said ATA Chief Economist Bob Costello in a statement. “But tonnage is certainly not strong at the moment as factory output is soft and there is an inventory reduction occurring throughout the supply chain. I believe the inventory correction should end this summer and truck freight, helped by better personal consumption, will accelerate, which is good because I think it is unlikely factory output will boost truck tonnage much until later this year or next year.”

The ATA executive added that overall truck tonnage is off 2.7 percent from a 2015 high reached in January.

While total freight volumes are not in rapid-growth mode, the current outlook bodes fairly well for the remainder of the year, even with industrial production showing declines for the past four months. The anticipated inventory correction, in tandem with the expectation that retail sales can continue to see increases, could provide a much-needed volume boost over the second half of the year.

Should these things come to fruition along with consistent jobs growth, it could result in a higher GDP, with many economists indicating that steady GDP for several quarters in the 3.0 percent or higher range could result in significant over the road tonnage gains.

“We expect truck tonnage to continue growing in 2015 given growth in housing, a stronger consumer, expected growth in U.S. imports, and higher automotive production though industrial production remains a headwind,” wrote Rob Salmon, Deutsche Bank analyst, in a research note.