January tonnage dips following a strong December, says ATA

Following up a strong month is never an easy thing to do. And the data from the American Trucking Associations’ (ATA) January 2012 trucking volume data was no exception.

The ATA reported that seasonally-adjusted (SA) truck tonnage in January dropped 4 percent, following a 6.4 percent gain in December. December represented the biggest annual monthly gain since July 1998 at 10.5 percent. January’s SA was 119.4 (2000=100) and was up 3.6 percent compared to January 2011.

Before December’s strong output November was up 6.1 percent and was preceded by 0.4 percent and 1.5 percent gains in October and September, respectively. For all of 2011, SA tonnage was up 5.8 percent, which was even with 2010, according to the ATA.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was down 3.5 percent in January to 112.1. It was also down compared to December’s116.4. Compared to December 2011, the NSA was up 6 percent.

Some industry analysts maintain that the not seasonally-adjusted index is more useful, because it is comprised of what truckers haul. 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.

“Last month I said I was surprised by the size of the gain in December,” ATA Chief Economist Bob Costello said in a statement. “Today, I’m not surprised that tonnage fell on a seasonally adjusted basis in January simply due to the fact that December was so strong. I’m still optimistic about truck tonnage going forward.  In fact, while many fleets said January was normal, they are also saying that February has been pretty good so far.”

Costello’s assessment matches up well with what many carriers are telling LM in that demand and tonnage remain fairly decent, especially when taking the slowly recovering economy and seasonality components into account as well.

And unlike recent years there does not seem to be a significant inventory rebuild in place, which could have also served as a driver for January volumes dipping. As LM has reported, retail inventories have been lean since well before the holiday shipping season, due to the fact that retailers don’t want to be caught with extra stock following the holidays (which happened in early 2009), which, in turn, forces them to sell leftover stock at a sharp discount in the first quarter.

What’s more, carriers have said that although capacity is tight they are well-positioned to take on more capacity during the first half of 2012 as they rebuild inventories and the economy slowly improves.

“We are optimistic about the tonnage outlook, but it really depends on how the recovery plays out,” said a carrier in an interview. “For that to happen, a lot needs to go the right way, though.”