June truck volumes are modest, reports ATA

Even with annual gains, June truck tonnage data issued this week by the American Trucking Associations (ATA) took a step back compared to previous months.

Seasonally-adjusted (SA) for-hire truck tonnage in June dropped 0.8 percent on the heels of a revised 0.9 percent (from 1.0 percent) increase in May. The index was at 128.6 (2000=100) compared to May’s 129.6 and is down 1.9 percent from the all-time high reading recorded in November 2013, which hit 131.0. On an annual basis, the SA headed up 2.3 percent, which paled compared to May’s 3.4 percent annual hike that stands as the second-highest annual gain of 2014, with April’s 4.2 percent annual bump the highest. The annual gain is the second smallest of 2014, with January’s 1 percent serving as the smallest. And on a year-to-date basis, the SA is up 2.8 percent.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment came was 132.9 in June, which was 0.5 percent lower than May’s 132.9 and was up 4.8 percent annually.

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 was one of those months where the data doesn’t quite match up with the anecdotal reports from fleets,” said ATA Chief Economist Bob Costello in a statement. “We had heard the freight volumes were good. “Despite the small reprieve in June, the second quarter was much better than the first quarter,” he said. “Tonnage increased 2.3 percent from the first quarter, which was the largest quarter to quarter gain since the first quarter in 2013. Compared with the second quarter in 2013, tonnage increased 3.2 percent, a percentage point better than the first quarter year-over-year increase.”

And he observed that prior to the month of June, truck tonnage had seen gains for four straight months, rising a cumulative 4.4 percent during that span.

Costello added in an ATA video interview last month that he believes the economy is picking up steam, even though the U.S. GDP was only up 1.0 percent in the first quarter. But he said the second quarter GDP could come in closer to 3.5 percent and be around 3 percent over the second half of the year. That bounce could help freight volumes in the form of tonnage or more loads.

“If you look at the year overall, it won’t be as good as last year, because the first quarter was just so tough, but that is somewhat misleading as the current quarter and second half of the year are going to be very nice and that is going to help truck freight volumes,” explained Costello.

KeyBanc Capital Markets analyst Todd Fowler wrote in a research note that tonnage growth in the coming months could be mixed depending on the sector.

“We anticipate favorable less-than-truckload volume and yield outlooks supporting margin improvement,” he wrote. “Further, utilization comparisons should benefit from lapping hours of service changes in the year-ago period, though we anticipate softer near-term volumes typical of July and August, and expectations for a modest fall peak in line with our recent container shipping outlook. Fleet growth could be hindered by limited driver availability, with wage pressure offsetting a portion of contractual rate increases.”