The American Trucking Associations (ATA) reported earlier today that March truck tonnage volumes grew slowly, showing an increase for the seventh time in the last eight months.
Seasonally-adjusted (SA) truck tonnage in March was up 0.2 percent, following a 0.5 percent increase in February and a 4.6 percent (from 4 percent) January decline and a 6.4 percent December increase. December represented the biggest annual monthly gain since July 1998 at 10.5 percent. The March SA reading was 119.5 (2000=100), ahead of February’s 119.3. On an annual basis, the March SA was up 2.7 percent, which the ATA said is the smallest annual SA increase going back to March 2009.
The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was up 9.1 percent in March over February at 123.2. The NSA was down slightly to March 2011’s 123.2.
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.
“March tonnage, and the first quarter overall, was reflective of an economy that is growing, but growing moderately,” ATA Chief Economist Bob Costello said in a statement. “The pace of freight definitely slowed from the torrid pace in late 2011. Most economic indicators still look good, which will continue to support tonnage going forward,
He added that the industry should not expect the rate of growth seen over the last couple of years, when tonnage grew 5.8 percent in both 2010 and 2011. 2012 tonnage expectations are at slightly less than 3 percent, which he said is more in-line with normal growth.
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.
Strength in manufacturing, somewhat steady retail sales, and signs of a slowly improving housing market are all serving as drivers of truck tonnage volumes. But unlike the past two years there does not seem to be a significant inventory rebuild in place.
And in an ATA video Costello noted that that it was not surprising that first quarter volumes slowed down, especially when compared to strong fourth quarter volumes, which benefitted from inventory gains that did not occur in the first quarter.
“I think trucking will continue to grow as we have a lot of support from the manufacturing sector and household spending as well, and even housing is improving a bit,” he said.
Wolfe Trahan analyst Ed Wolfe noted in a research note that based on anecdotal reports more pronounced truckload capacity constraints are expected as the year progresses. He cited a conversation with a shipper whom said shippers started the year off with a slight upper hand with pricing given the slower than expected volume start, but this is not expected to hold, particularly with a tightening driver supply.
“On the demand side, similar to last year, our contact expects volumes to be flat to modestly higher on a y/y basis with a mild peak season,” wrote Wolfe.