The American Trucking Associations (ATA) reported today that July truck tonnage was mixed.
Seasonally-adjusted (SA) for-hire truck tonnage in July was up 2.8 percent compared to June at 135.0 (2000=100) and marked its second-highest monthly reading ever, next to January’s 135.8. On an annual basis, SA tonnage in July headed up 3.7 percent, and on a year-to-date basis through July it is up 3.4 percent. The 2.8 percent sequential tonnage gain stands as the largest for a single month since November 2013
The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment was 137.3 in July, down 1.1 percent from June and up 4.0 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.
“After several soft months starting in February, tonnage really snapped back in July,” said ATA Chief Economist Bob Costello in a statement. “July was the single best monthly gain since November 2013. However, I remain concerned in the near term about the high level of inventories throughout the supply chain. This could have a negative impact on truck freight volumes over the next few months.”
The ATA executive added that improved retail sales, factory output, and housing starts also helped to drive tonnage gains in July.
The high inventory-to-sales ratio has been a concern for freight transportation volumes for several months and is again reflected in this latest batch of ATA data. But some industry stakeholders expect to see seasonal gains in the coming months through back-to-school promotions and holiday season planning, which would appear to match up with the ATA’s expectation of volume gains later this summer, assuming the inventory-to-sales ratio heads down some.
Carriers and shippers are encouraged by current volumes, and volumes could inch higher should the inventory-to-sales ratio decline and consumer activity heat up in advance of the holidays and back-to-school shopping in some parts of the country.
And it is also worth noting that the overall economy was stronger at this time last year, too.
Rosalyn Wilson, senior business analyst with Parsons, and author of the annual CSCMP State of Logistics report and contributor to the Cass Freight Index report, pointed out that 2014 was paced by consumer spending gains.
“Comparing [2015] to the previous several years demonstrates that the economy is exiting its prolonged dormant state and consumers are finally leading the way,” she commented. “For the remainder of the year, both imports and exports should pick up, domestic production will gain strength, and consumers will spend.”
Deutsche Bank analyst Rob Salmon wrote in a research note that his firm expects truck tonnage to grow in the second half of the year, given growth in housing and increased automotive production, though industrial production and elevated inventories are potential headwinds.