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September 21, 2021 12:00 PM, EDT

August Truck Tonnage Posts First Monthly Gain Since March

tonnage John Sommers II for Transport Topics

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Truck tonnage in August notched its first sequential monthly gain in five months, and dipped just slightly on a year-over-year basis, American Trucking Associations said.

The ATA For-Hire Truck Tonnage Index rose 0.5% in August compared with July, registering a seasonally adjusted 110.3, the federation announced Sept. 21. Compared with August 2020, the index saw a 0.5% decline.

For the purpose of the index, the year 2015 = 100.

“August’s monthly gain, while small, was the first since March,” ATA Chief Economist Bob Costello said. “It is important to remember that ATA’s tonnage data is dominated by for-hire contract freight, with a very limited amount of spot market freight. I continue to believe that tonnage has not recovered to pre-pandemic levels for two main reasons — broader supply chain issues, like semiconductor shortages, as well as industry-specific difficulties, including the driver shortage and lack of equipment.”

ATA's Bob Costello

Costello

Costello said the industry is short around 60,000 drivers due to retirements, attrition and other issues. Plus, he noted that capacity among for-hire carriers is currently constrained.

“Truckload carriers are operating fewer trucks than a year earlier, which makes it difficult to increase freight volumes significantly,” he said. “Despite some supply chain issues, demand remains strong for trucking services.”

Some of that demand could be coming from the retail sector; the National Retail Federation in its latest report said retail sales — which exclude automobile dealers, gasoline stations and restaurants to focus on core retail — posted a 12% year-over-year increase and were up 2.3% compared with July. The August jump was led by sharp increases in sales in clothing, sporting goods and electronics, NRF said.

“The consumer remains rock solid despite the trifecta of macroeconomic headwinds we’ve seen this year, including tapering off of government stimulus, elevated COVID-19 infections, and ongoing supply chain challenges in the form of shortages of labor and goods,” NRF Chief Economist Jack Kleinhenz said.

The NRF said retail sales are up 15% year-over-year for the first eight months of the year.

On the spot market, the DAT Truckload Volume Index said spot market rates neared all-time highs in August. The index — which measures dry van, reefer and flatbed loads moved by truckload carriers — rose 0.8% compared with year-ago levels and was up 1.1% compared with July. The spot van rate averaged $2.22 per mile nationally in August, up 19 cents compared with July and 41 cents higher than August 2020. At $2.02 per mile, the average spot linehaul rate for vans was the highest monthly national average on record, and it exceeded the national monthly average contract rate for the first time since January 2018.

“Volatility in shipper networks due to shifting consumer purchasing spilled over to the spot market,” DAT Chief of Analytics Ken Adamo said. “For instance, commercial food service is way down, but grocery purchases are up. Asset-based carriers continued to honor their committed volumes but didn’t necessarily provide additional surge capacity. As a result, the number of available loads increased, and prices rose to attract additional capacity.”

Ken Adamo

Adamo

The monthly Logistics Managers’ Index in August was down 0.7% at 73.8 from the previous month’s 74.5, but still recorded the fifth-highest reading in its history.

Each month, the LMI is put together by business and logistics professors at several universities, including Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University and the University of Nevada, Reno, and in conjunction with the Council of Supply Chain Management Professionals.

“The logistics industry remains tight, and based on future predictions and industry experts, seems likely to stay that way through the rest of the year,” said the report’s authors, who are predicting continued supply chain difficulties, especially during the upcoming holiday shopping season.

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“Evidence of firms stocking up on inventory in advance of Q4 is evident throughout global transportation networks,” they said. “There are reports of 20 miles of backups for some rail lines moving through Chicago, and U.S. ports continue to be packed with goods coming from Asia. There is no sign of relief on the horizon for ports, as maritime bookings were up 40% from last August, giving more evidence that we are seeing the beginning of peak season.”

Several major retailers, including athletic shoe and apparel giant Adidas, shoe company Crocs and toy manufacturer Hasbro have warned their retail customers to be prepared for shortages because of the slow pace of shipping and high consumer demand.

Trucking represents 72.5% of tonnage carried by all modes of domestic freight transportation, according to ATA. Trucks hauled 11.84 billion tons of freight in 2019. Motor carriers collected $791.7 billion, or 80.4% of total revenue earned by all transport modes.

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