ATA Truck Tonnage Remains Unchanged for January
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The freight market didn’t change much starting the new year with tonnage remaining sequentially the same for January, American Trucking Associations reported.
The ATA For-Hire Truck Tonnage Index was reported to be 111.9 for December as well. The report pointed out it remained unchanged despite factors that depressed freight volumes. The index was up 0.3% from the same month last year. This is the first year-over-year increase since August. The not seasonally adjusted index improved 1.1% sequentially.
“After declines in November and December totaling 1.7%, tonnage was unchanged in January” said ATA Chief Economist Bob Costello. “This outcome is impressive considering the massive winter storm that brought cold temperatures and significant snowfalls to large parts of the country, including those that rarely see such storms.”
Costello pointed out that softness in manufacturing and retail sales continue to be a drag on truck freight volumes. He also suspects the wildfires in California likely caused freight disruptions. Because of that, he views tonnage being flat as a positive sign.
ATA calculates its monthly tonnage index based on feedback from contract freight. In calculating the index, 100 represents 2015.
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The Cass Freight Index reported that shipments decreased 8.2% year over year to 0.954 from 1.039. They also fell 5.3% from 1.007 in December. The report found that the decline was likely due to both normal seasonality and worse-than-normal weather.
“There were a couple of things that hit the freight market,” said Jonathan Phares, assistant professor of supply chain management at Iowa State University. “Obviously, we had some abnormal winter weather in the Midwest early in the month. Then the threats of tariffs and things have gotten shippers behaving differently.”
Phares noted these influences were somewhat contradictory, with weather suppressing freight while the threat of tariffs increased it. But the situation is causing uncertainty, he said, as it’s unclear which tariffs will remain in place and whether additional ones are coming. Phares also questioned why the ATA and Cass indexes were so different this time around.
Phares
“ATA is even predicting freight growth of 1.6% in 2025,” Phares said. “I’m curious to see if that actually does come given this downward trend, and then there’s still a lot of uncertainty around these tariffs. I would just be very interested to see if some of these big tariffs go into place and then stick.”
The Logistics Managers’ Index registered 62 for January compared with 57.3 in December. This was the fastest expansion in the overall index since June 2022. The report also highlighted how inventories drive many logistics industry shifts.
“The overall index almost always increases in January as supply chains begin replenishing inventories after running them down in December,” the LMI report noted. “Which seems to be the case here. The strong LMI is also powered by significant rates of expansion across the three cost/price metrics, as each of them have registered their highest score in 2-3 years.”
The LMI report is compiled by researchers at Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals.
Dhawan
“When it comes to the direction of the economy, the stock market has done very well, and people seem to be spending on things they really couldn’t do during COVID, which was travel,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “So that kind of spending has not shown any slowdown.”
The U.S. Department of Commerce reported that retail sales fell 0.9% sequentially in January. This followed two months of growth. Dhawan suspects the decline was primarily driven by snowstorms and other weather disruptions. He noted a decrease in online sales wouldn’t make sense otherwise, considering people who economize tend to buy more online. But he expects spending to continue given favorable trends with retirement savings.
“That said, the issue is the second half of the economy,” Dhawan said. “The reason is, since the new administration came in, the talk in the air is tariffs, tariffs and tariffs. And because of that, you are seeing that people were buying stuff in advance, which was showing up at the ports.”
Dhawan added that companies with holding and borrowing capacity brought cargo in ahead of schedule to avoid potential tariff costs. He noted they can even profit on the difference if the cargo is already warehoused before a tariff on it is implemented.
“That’s why you were seeing an improvement in truckloads in the U.S. economy at the ports,” Dhawan said. “But the issue is the second half. Now, ultimately, it’s the quality of the jobs and how many jobs are being produced, which increases the firepower of the consumer on the margin. That is weak.”
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