Truck tonnage is up in May, reports ATA

The American Trucking Associations (ATA) reported this week that truck tonnage showed gains to varying degrees in May.

The ATA’s advanced seasonally-adjusted (SA) For-Hire Truck Tonnage Index rose 0.7%, to 113.8 (2015=100), from April to May, following a 2.7% (upwardly revised from an original reading of 2.2%) March to April increase.  

Compared to May 2017, the SA index rose 7.8%, which was below the 9.9% annual spread recorded in April. Through the first five months of 2017, ATA said SA tonnage is up 8% annually, far outpacing the 3.8% annual gain recorded for the same period a year ago, reflecting the current strength of the trucking market.

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 118 in May, at 109.7, topping April by 7.6%. This reading is down 24.5% annually.

“This continues to be one of the best, if not the best, truck freight markets we have ever seen,” said ATA Chief Economist Bob Costello in a statement. “May’s increases, both sequentially and year-over-year, not only exhibit a robust freight market, but what is likely to be a very strong GDP reading for the second quarter. However, in the near-term, look for moderating growth rates for freight simply due to more difficult year-over-year comparisons, not from falling tonnage levels.”

Speaking on a recent conference call hosted by investment firm Stifel, Costello said that there are a few drivers of the current solid freight activity, including consumer spending, construction activity, manufacturing activity, and inventory levels throughout the supply chain.

“[L]ooking at the over-the-road TL and LTL markets, I like to look at factory output,” he said. “2018 is shaping up to be the highest level of production since 2007, and 2019 should be the highest on record. If we look at year-over-year growth rates, we're going to go essentially no growth in the sector from 2015 and 2016 to 2.8% growth this year and over 3% growth next year.”

Werner Enterprises President and CEO Derek Leathers recently told LM that the current freight market is the strongest he has seen in his 27-year career, adding that when thinking about the strength of the market, seasonality has to be factored into the equation.

“January through March usually being a slower period, and it has been anything but that this year,” he said. “It really…started around mid-year last year and has just continued to build. We saw virtually no drop-off at all from the fourth quarter to the first quarter, with freight activity remaining strong through the year this far. We are very bullish on what we are seeing and very excited.

As for what the key drivers are, Leathers the combination of economic lift and just a stronger economy with capacity still being constrained, both through the combination of ELD (electronic logging devices), and the general driver shortage, as well as inventory levels coming in lower than they have in recent years.