Truck tonnage gains take a step back in February, reports AAR

The American Trucking Associations (ATA) reported earlier this week that February truck tonnage dipped on the heels of a strong start to the year in January.

Seasonally-adjusted (SA) for-hire truck tonnage in February was down 3.1 percent (2000=100) compared to a revised 1.3 percent (from 1.2 percent) increase in January. ATA said this reading marks the lowest level for the SA index going back to last September.

On an annual basis SA tonnage was up 3 percent compared to February 2014, which the ATA said represents the smallest annual gain since June 2014, as well as below the 2014 annual increase over 2013 of 3.7 percent. January’s annual SA gain was 6 percent compared to January 2014, which the ATA said marks the single largest annual gain in more than a year.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 118.9 in February and was 6.4 percent below January’s 127.0. The NSA was up 2.1 percent compared to February 2015.

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.

ATA officials said in January that the organization has revised the seasonally adjusted index back five years as part of its annual revision, adding that for all of 2014, tonnage was up 3.7 percent, which was slightly better than the 3.4 percent originally reported. In 2013, ATA said the index increased 5.5 percent.”

“The February drop in truck tonnage was not a surprise,” said ATA Chief Economist Bob Costello in a statement. “Retail sales, manufacturing output and housing starts were all off during the month, so the tonnage decline fits with those indicators. The surprise would have been had tonnage increased with all of those sectors falling.”

The ATA executive also cited winter weather impacting a significant portion of the U.S. in February, which subsequently hindered truck tonnage and tonnage-driven industries such as retail, manufacturing and housing starts.

Deutsche Bank analyst Rob Salmon wrote in a research note that West Coast port congestion and challenging winter weather conditions likely constrained volumes.

“We expect truck tonnage to continue to grow in 2015 given a stronger consumer (rising employment, solid income gains, and lower gas prices inflating disposable income), expected growth in U.S. imports, higher automotive production, and growth in housing,” explained Salmon.

Despite a less-than-great month for overall tonnage, many industry stakeholders are feeling good about trucking’s prospects for 2015, given decent consumer momentum, low gas prices, and steady manufacturing and industrial production growth.