December Tonnage Rises 1.1%, Still Held Back by Inventory Overhang, ATA Reports

John Sommers II for TT
Truck tonnage rose 1.1% in December over the same month of 2014 as growth continued to be held back by excessive inventory that reduced freight demand, American Trucking Associations reported.

The trade group’s advanced seasonally adjusted index reached 135.6 in December after a 1% rise from November. The gain on a month-to-month basis brought the for-hire index closer to the all-time record of 135.8 set in January of last year.

The December results brought the full-year tonnage growth to 2.6%, capping a year when the report showed particularly slow growth over the final four months, including a rise of just 0.2% in November. In total, tonnage rose 1.2% on a year-over-year basis from September through December.

“Tonnage ended 2015 on a strong note, but it was not strong for the year as a whole,” ATA Chief Economist Bob Costello said. “With year-over-year gains averaging just 1.2% over the last four months, there was a clear deceleration in truck tonnage."

“At the expense of sounding like a broken record, I remain concerned about the high level of inventories throughout the supply chain,” he said, maintaining his view that freight growth will be hurt by that situation for the next few months at least. "This inventory cycle is overriding any strength from consumer spending and housing at the moment.”

Costello noted that the total inventory-to-sales ratio is at the highest level in more than a decade, excluding the recession in 2008 and 2009.

ATA also said the not seasonally adjusted tonnage reading, measuring actual freight moves, was 132.7 in December.