ATA reports slight December 2015 truck tonnage gains

Truck tonnage levels showed modest gains in December to finish 2015, according to data issued today by the American Trucking Associations (ATA).

Seasonally-adjusted (SA) for-hire truck tonnage in December at 135.6 (2000=100) was 1 percent ahead of November’s 134.3 and ahead of a 0.9 percent October to November decline. December’s SA level is 0.1 percent the all-time high of January 2015’s 135.8.

Compared to December 2014, the December SA saw a 1.1 percent increase, topping November, which saw a 0.2 percent bump. Full-year 2015 SA tonnage was up 2.6 percent compared to full-year 2014.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment came in at 132.7 in December, which outpaced November’s 129.0 by 2.9 percent. And December SA was 7.3 percent above the 123 recorded in December 2014.

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.

“Tonnage ended 2015 on a strong note, but it was not strong for the year as a whole,” said ATA Chief Economist Bob Costello in a statement. “With year-over-year gains averaging just 1.2 percent over the last four months, there was a clear deceleration in truck tonnage. At the expense of sounding like a broken record, I remain concerned about the high level of inventories throughout the supply chain. The total business inventory-to-sales record is at the highest level in over a decade, excluding the Great Recession period. This will have a negative impact on truck freight volumes over the next few months at least. And, this inventory cycle is overriding any strength from consumer spending and housing at the moment.”

As previously reported, the inventory overhang continues to hinder freight transportation volumes and particularly impacts trucking as it moves roughly 70 percent of all U.S. freight.

When inventory levels running too high as they currently are now, it typically results in transportation volumes seeing declines, which is where things currently stand.

What’s more increased consumer spending levels during the holidays did not materialize to anticipated levels, with December retail sales underwhelming, coupled with consumers having opted to pay down debt rather than shop more even though low gas prices were viewed not all that long ago as something that would spur increased spending, and another thing being a way to empty shelves and warehouses of the excess inventory, which is clearly needed.

Industry analysts have noted that the most recent batch of ATA numbers reflect muted freight demand, which is also apparent in terms of weak spot market demand and soft truckload capacity, too.

BB&T Capital Markets Analyst Thom Albrecht commented in a research note that tonnage prospects early into 2016 are not inspiring.

“Looking ahead, the ongoing slump in industrial production, improved rail service, consolidation in brick and mortar stores, growth in online sales (more of a relative help to parcel and LTL than to van TL) and other factors are likely to cause van shipments to shrink,” he said. “And even if economic activity accelerates in 2017, van shrinkage could occur again.”