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December 22, 2020 12:00 PM, EST

ATA Truck Tonnage Index Slides 3.8% in November

Trucks on the road in autumnWhen measured month-to-month, tonnage increased 3.7%. ATA Chief Economist Bob Costello said the rise was fueled by a rush in e-commerce sales. (Willowpix/Getty Images)

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Truck tonnage in November declined a seasonally adjusted 3.8%, marking the eighth consecutive month of year-over-year declines, American Trucking Associations said Dec. 22. However, the ATA For-Hire Truck Tonnage Index increased 3.7% in November after falling 5% in October when measured month-to-month.

In November, the index equaled 112.2 compared with 108.3 in October. (The index equaled 100 in 2015.) Year-to-date, tonnage is down 3.8% compared with the same period in 2019.

ATA Chief Economist Bob Costello said a rush in e-commerce sales fueled the month-over-month increase, and he anticipates the economy will improve as more people get the COVID-19 vaccine.

“The 2020 seesaw pattern continued in November as typical seasonality is not holding this year,” Costello said in a statement. “It was a nice gain, but the rebound was not enough to make up for October’s drop. Robust retail freight, helped by consumer spending — especially e-commerce — and very lean inventories helped truck tonnage last month.”

Costello added, “Strong single-family housing starts are also aiding freight tonnage, but lackluster restaurant, manufacturing and energy sectors remain a drag. I expect these softer industries to benefit from widespread COVID-19 vaccinations in 2021.”

ATA’s tonnage index is dominated by contract freight as opposed to spot market freight. Costello noted that more than 80% of the freight carried in the U.S. is contract freight.

Bob Costello

Costello

Trucking serves as a barometer of the economy, representing 72.5% of tonnage carried by all domestic freight transportation modes, including manufactured and retail goods. ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s.

Meanwhile, the Logistics Manager’s Index Report was at 70.8 in November, compared with 54.4 a year ago. The November figure was down slightly from October’s 71.6. It represents a significant growth rate from earlier in the year, especially in the spring, when the economy went into recession. October’s and November’s figures are up nearly 20 points from the all-time low of 51.3 in April.

“The high rates of growth reported in November stem from high prices and a record contraction in available capacity,” Arizona State University business professor Dale Rogers said. “As we have previously reported, much of this growth stems from the increased demand for logistics services and infrastructure due to the new ways in which people are shopping due to the ongoing pandemic.”

Rogers said that as the holiday shopping season ends, it’s apparent that because of the pandemic, e-commerce is growing faster than expected.

In the third quarter of 2020, online purchases were up 37% when measured against the same period in 2019, reaching nearly $199.4 billion compared with almost $145.5 billion, he cited.

“An early indicator of this shift in consumer shopping behaviors can be seen in the 50% reduction in foot traffic, combined with the 22% increase in online sales that were reported on Black Friday,” Rogers said.

A report from Mastercard Spending Pulse on Dec. 26 said U.S. holiday season sales beat earlier expectations as online shopping surged. Total retail sales grew 3% over the 75-day holiday period, versus a forecast for 2.4% growth. In the 2008 recession, sales dropped by 3.5%. Mastercard said its survey showed online sales rose 49% compared with 2019, and e-commerce now is responsible for 20% of all spending, up from 13% in 2019. Mastercard measured spending from Oct. 11 through Dec. 24, extending the holiday season because many retailers started sales early to keep crowds down at stores. When measured in the traditional Nov. 1-to-Christmas Eve period, retail sales still were up 2.4%.

The latest DAT Freight and Analytics report, on Dec. 23, says that the trucking industry’s capacity remains very tight but not as challenging as it was earlier in the fall. On Dec. 17, DAT said its Truckload Volume Index, a measure of dry van, reefer and flatbed loads moved by truckload carriers, was 15% higher in November 2019 but down 8.3% when measured against October.

Meanwhile, spot market rates for van and refrigerated freight remained at record levels in November. The national average for flatbed freight was down slightly from October’s two-year high. The spot van rate averaged $2.45 per mile nationally in November, 63 cents higher than in 2019 and 5 cents higher than October’s rate. November’s national average flatbed spot rate was $2.44 per mile, 34 cents higher than a year ago and 1 cent less than in October.

“Spot rates showed glimpses of plateauing midmonth for dry van and reefer freight but then surged toward the end of the month, as they seasonally do around the holiday break,” DAT Chief of Analytics Ken Adamo said. “As drivers took time off during the Thanksgiving week, available capacity decreased, which put upward pressure on spot rates as shippers moved last-minute loads.”

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