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Truck tonnage fell 2.1% in November compared with year-ago levels, the first year-over-year decline since April 2017, according to American Trucking Associations’ For-Hire Truck Tonnage Index.
Last month, the seasonally adjusted index equaled 113.5, compared with 118.9 in November 2018. In calculating the index, 100 represents the year 2015.
“It’s tough to sugarcoat November’s reading,” ATA Chief Economist Bob Costello said in a Dec. 23 news release. “While disappointing, it fits with the expected soft gross domestic product reading expected in the fourth quarter and reports of a soft fall freight season.”
The November result also marked the steepest decline for the index since February 2017. That said, the index is up 3.3% year-to-date compared with last year.
ATA noted that tonnage data used for the index is dominated by contract freight.
On a sequential basis, the index declined 3.5% from October’s reading of 117.6, a trend that has persisted since summer, Costello noted.
“It was the third decrease in the last four months, and the index is down 7.2% since July,” he said.
ATA also noted that October’s reading was revised down compared with its November press release.
The not seasonally adjusted index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, equaled 115 in November, 7.9% below the October level of 124.8.
DAT Solutions said its Truckload Volume Index was up to 179 in November, compared with 170 in the same month in 2018. The index measures the number of loads moved, and 100 equals January 2015. While the number was up eight points over the 2018 figure, month-to-month, the index was down from 204 in October.
DAT also reported that a strong end of the month in November pushed truckload pricing higher.
“October still sees the highest volumes, with retail freight heading to brick-and-mortar stores,” said Peggy Dorf, senior market analyst with DAT Solutions.
The November van rate was $1.82 per mile, which was down from $2.04 per mile in 2018. However, the November 2019 van rate was 2 cents higher than the rate in October, when it was $1.80 per mile.
The rates for refrigerated units in November averaged $2.18 per mile on the spot market. That’s 29 cents lower than the November 2018 average but 7 cents higher than October. Reefer volume in November rose 3.4% compared with a year earlier, but it was down 6.1% from October’s peak.
Flatbeds and other open-deck equipment averaged $2.10 per mile in November, a 32-cent drop from the same period a year ago, and it is down 7 cents from October. DAT Solutions says volume slid 9.5% year-over-year and 23% when compared with October.
“The flatbed segment has been in decline for much of this year, due to a lull in the oil and gas sector that generates a large portion of freight for open-deck equipment,” DAT said in its commentary.
However, despite the decline in numbers for November, DAT is optimistic the year still will finish relatively strong.
“For e-commerce, those deliveries continue through December and beyond,” Dorf said. “The speed of e-commerce also creates different demands on shippers. Consumers expect immediate delivery, and the spot market gives shippers the flexible capacity to fulfill those last-minute orders, but that urgency drives rates higher.”
The Cass Freight Index is down 3.3% year-over-year, and shipping volumes have been negative for 12 months in a row. “Over the coming months, expect year-over-year growth to flatten out, as the industrial economy is expected to bottom, while the consumer is expected to remain relatively healthy,” Cass said in a statement. “Flat is the new up.”
FTR uses zero as its baseline, and any number below that is considered negative. The October index was minus 1, the same as it was in October 2018.
FTR Index says in October trucking conditions improved but remained in negative territory.
The company did not release its November analysis by press time.
FTR says it projects its index to remain steady in a “mediocre environment” through the first half of 2020.
“Although we continue to see high-profile trucking failures — often due to internal management issues — we see a generally stable environment for the industry,” said Avery Vise, FTR’s vice president of trucking. “Manufacturing is weakening, but residential construction is firming, and job growth and consumer spending remain strong. While we expect little freight growth in most segments, volume remains solid by historical standards.”
Vise expects 2020 to remain relatively slow, at least initially.
“As we go into next year, we are looking at some growth. Not much, under 1% total, but it’s still growing,” Vise said. “But unfortunately for the for-hire carriers, 1% growth is not enough to put any pressure on rates.”
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