ATA reports seasonally adjusted tonnage is up 1.2 percent in June

Even with sequential growth occurring from May to June, overall trucking growth remains at a standstill to a large degree, based on data released today by the American Trucking Associations (ATA).

Seasonally-adjusted (SA) truck tonnage in June was up 1.2 percent on the heels of a 1.0 percent (revised from an original reading of -1.7 percent) decline in May. ATA officials said that June’s 1.2 percent SA bump represents the largest month-to-month increase in 2012 year-to-date. But even with the gain it pointed out that that the SA contracted a cumulative 1.2 percent in April and May. June’s SA reading was 119.0 (2000=100), which was ahead of May’s 117.5. The SA is 3.2 percent above June 2011, marking the smallest annual SA gain since May 2012. Through the first six months of the year SA tonnage is up 3.7 percent.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, fell 0.9 percent from May to come in at 123.0 in June. This was up 0.7 percent on an annual basis.

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.

“June’s increase was a pleasant surprise, but the lower year-over-year gain fits with an economy that has slowed,” ATA Chief Economist Bob Costello said in a statement. “Manufacturing output was strong in June, which helped tonnage levels.”

Costello added there is still a fair amount of concern about businesses sitting on cash instead of hiring more workers or spending it on capital, both of which would give the economy and tonnage a shot in the arm, as they are worried about Europe and the U.S. fiscal cliff at the end of the year.  The ATA chief economist also lowered his tonnage outlook for 2012 to the 3 percent to 3.5 percent range due to recent economic weakness.

That estimate would come in below the matching annualized rates of 5.8 percent in both 2010 and 2011, according to ATA data.

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.

What’s more, mixed economic signals remain the norm. June retail sales numbers and manufacturing data from the Institute of Supply Management hit their lowest levels since 2009, and many freight transportation and logistics companies said on earnings calls that they remain concerned over the economy for the second half of this year.

“Economies around the world are showing signs of weakening, and our customers are increasingly nervous,” said UPS CEO Scott Davis on the company’s second quarter earnings call yesterday. “In the U.S., uncertainty, stemming from this year’s elections and the looming fiscal cliff constrains the ability of businesses to make important decisions such as hiring new employees and making capital investments and re-stocking inventories. This will further restrict economic growth. We think current second half economic forecasts in the U.S. are too high, with GDP growth likely closer to 1 percent.”