Trucking news: ATA seasonally-adjusted tonnage is up in September

Even though the economy and the freight transportation market are still on a bumpy road, truck tonnage took a step forward, with September volumes up compared to August, according to the American Trucking Associations (ATA).

The ATA’s advance seasonally-adjusted (SA) For-Hire Truck Tonnage index was up 1.7 percent in September, following a revised 2.8 percent decline in August and a 1.7 percent gain in July. The current SA index is at 108.7 (2000=100).

Along with the first sequential increase in three months, the SA was up 5.1 percent compared to September 2009, topping August’s 2.9 percent annual increase. Both these months are off, though, compared to July’s 7.4 percent rise. September marks the tenth straight month the SA has been up year-over-year, even though the relatively easy comparisons to 2009 are not as significant.

The ATA also reported that its not seasonally-adjusted index (NSA), which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, came in at 112.4 in September, which was below August’s 113.5 by 0.9 percent. Compared to September 2009’s 107.8 NSA, the September 2010 NSA is up 4.6 percent, a smaller annual increase than August’s 7.7 percent.

As LM has reported, 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.

In the first half of 2010, many shippers, carriers and analysts told LM they were optimistic about the trucking market, especially when comparing it to 2009. But since then there have been various economic reports, including today’s federal government report that second quarter GDP growth fell to 1.7 percent from the first quarter, and others which indicate the recovery is slowing down.

Some other signs of a slowing economy are also evident, with unemployment still high, retail sales down, and consumer confidence falling. These factors all have the potential to bring tonnage growth down in the coming months.

ATA Chief Economist Bob Costello said in a statement that truck tonnage over the last few months fits with an economy that is growing very slowly.

“While I am glad to report that tonnage grew in September, the fact remains that truck freight volumes leveled off over the summer and early autumn,” said Costello. “This is a reflection of an economy that is barely growing.”  And he also said that the trucking industry is significantly smaller than it was prior to the recession, but as a result, is better equipped to deal with slower than normal tonnage growth.

Despite the myriad challenges in the trucking market, an executive at a large carrier company told LM that demand at his company continues to hold up relatively well.

“Shippers are clearly interested in securing capacity,” said the executive. “They’re taking steps to ensure they have the resources they need from their key carriers, particularly as we approach the higher-volume seasonal shipping months.” 

Even while securing capacity is a top priority for shippers, it is clear more growth needs to occur before a meaningful recovery in is intact, according to Chuck Clowdis, Managing Director Transportation & Supply Chain Advisory Services at IHS Global Insight.

“In my early years in the motor carrier industry, September and October saw the highest tonnage and (freight) bill count of any other months,” said Clowdis. “This year it appears that inventories peaked back in the summer and the fall season spike just isn’t going to happen this year. The economy is sluggish to say the least; but then with unemployment hovering at 10%, consumers aren’t buying the usual retail goods that are transported by truck.  The 1.7% tonnage increase in September can only be taken as a good omen because it isn’t a drop. Until we have a stable economy; consumers regain confidence and jobs; we will continue on a very slow road back to the days of 2005-2007.”

Trucking serves as a barometer of the U.S. economy, because it represents 68 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. The ATA notes that it hauled 8.8 billion tons of freight in 2009, and that motor carriers collected $544.4 billion-or 81.9 percent-of total revenue earned by all transport modes.