Truck tonnage is mixed in October, reports ATA

October truck tonnage volumes, which were issued today by the American Trucking Associations (ATA), were mixed.

The ATA’s advanced seasonally-adjusted (SA) For-Hire Truck Tonnage Index for October, at 118.1 (2015=100), fell 0.3% off of September’s 118.5 reading, which was upwardly revised from an initial reading of 117.6. Compared to October 2018, the SA reading was up 1.7%, which ATA said represents the lowest annual increase going back to June. On a year-to-date basis through June, SA tonnage is up 3.9% annually. 

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 125.4 (2015=100), topping September by 8.4%.

ATA officials said that the organization’s tonnage data is “dominated by contract freight,” which they observed is performing significantly better than what a called a plunge in spot market freight in 2019.

October’s tonnage change, both sequentially and year-over-year, fits with an economic outlook for more moderate growth in the fourth quarter,” said ATA Chief Economist Bob Costello in a statement. “The ongoing slowdown in manufacturing activity also weighed on truck tonnage last month.”

Robert W. Baird & Co. analyst Ben Hartford observed in a recent research note that trucking demand trends were still sluggish into October with contracts continuing to describe peak season expectations as more “muted” and certainly less robust than late 2018's tariff-fueled frenzy.

And on the spot market side, he noted that pricing data is still soft and consistent with weak truckload fundamentals throughout 2019.   

Celadon CFO Thom Albrecht explained on a recent Webcast hosted by TranzAct Technologies, CSCMP, and NASSTRAC that up until around mid-2019, roughly 80%-to-85% of the things carriers had been experiencing was due to the infusion of supply and what he called a modest downtick in demand, with demand becoming more uncertain in recent months.

Signs of declining demand have been evident in recent manufacturing data points issued by the Institute for Supply Management, which Albrecht said serves as a future gauge of freight production. ISM reported in early September that its key manufacturing reading, the PMI, was below 50 (a reading of 50 or higher indicates growth is occurring) for the first time since August 2016, with new orders, the most direct indicator of demand, negative for the first time since December 2015, snapping a 43-month stretch of growth.