Truck tonnage readings headed down, for the month of April, according to data issued today by the American Trucking Associations (ATA).
The ATA’s advanced Seasonally Adjusted (SA) For-Hire Truck Tonnage Index for April—at 114.7 (2015=100)—dropped 0.3%, from March to April, following a 2.3% gain, from February to March, which was upwardly revised from an original reading of a 5.1% decline. This came on the heels of a 2.3% February decline (revised from an initial reading of a 4.5% decline), and a 1.4% (upwardly revised from an original reading of 1.4%), from December to January, which came in at 115.2.
On an annual basis, April SA tonnage headed up 6.9% marking an improvement over a 2.4% annual decrease in March, which was upwardly revised from a 9.5% annual gain reading in March).
The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment and the metric ATA says fleets should benchmark their levels with, came in at 114.3 in April, which was 4.2% below March’s 119.3 reading (upwardly revised from an original reading of 110.6). ATA officials pointed out that its For-Hire Truck Tonnage Index “is dominated by contract freight as opposed to spot market freight.”
“After a revised increase in March of 2.3%, the April index declined just slightly,” said ATA Chief Economist Bob Costello in a statement. “The outlook is solid for tonnage going forward as the country approaches pre-pandemic levels of activity, with strong economic growth in key areas for trucking—including retail, home construction and even manufacturing. Additionally, the index increased on a year-over-year basis for the first time since March 2020. Part of the reason for the gain was due to an easy comparison with when the index fell significantly in April 2020. But I’m expecting increases, albeit smaller than April’s, on a year-over-year basis going forward. Trucking’s biggest challenges are not on the demand side, but on the supply side, including difficulty finding qualified drivers.”
Buoyed by various factors, including solid retail sales, strong manufacturing output, high import levels, and strong e-commerce activity, many drivers for solid freight activity remain firmly in place.
What’s more, with more people continuing to receive the COVID-19 vaccine, coupled with pent-up consumer demand, the outlook, for the coming months remains solid, too.
In a recent interview with LM, Costello explained that the ongoing impact of the COVID-19 pandemic, especially early on, had a major impact on the trucking market, with a major rush on certain consumer staples like food and paper products prior to conditions plummeting around May 2020.
But by the middle of 2020 and into the fall he said conditions saw material improvements, due to things like increased e-commerce activity and people buying more goods than services.
“E-commerce is a big part of that,” he said. “And certain parts of trucking are up still despite the pandemic and is really related to the buying of consumer goods…certainly around e-commerce. Some of the freight volumes around single-family housing starts is strong, too. Temperature-controlled volumes related to restaurants is still off but related to grocery stores is way up. It has been unusual in that there have been different outcomes depending on which type of supply chains you are in and what type of freight you are hauling.”
Robert W. Baird & Co. analyst Garrett Holland wrote in a recent research note that key freight demand indicators have reaccelerated in recent weeks and should benefit from additional fiscal stimulus.
“Inventory restocking also remains a tailwind that likely carries through 2021,” he wrote. “Supply growth remains the biggest wildcard, highlighted by elevated Class 8 orders, yet production challenges and driver availability remain key constraints.”