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August 24, 2021 12:00 PM, EDT

July Sees 2.9% Year-Over-Year Decline in Truck Tonnage

Driver Shortage, Fewer Trucks Play Part
TonnageJohn Sommers II for Transport Topics

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Truck tonnage in July declined 2.9% when measured against the same month in 2020, according to American Trucking Associations’ For-Hire Truck Tonnage Index.

In July, the index equaled 109.8, the federation announced Aug. 24.

When measured against the previous month, the index declined 1.2% in July after falling 2% in June.

The index was 100 in 2015.

“Softness in tonnage over the last few months is due more to supply constraints, rather than a big drop in freight volumes,” ATA Chief Economist Bob Costello said. “Not only are there broader supply chain issues, like semiconductors, holding tonnage back, but there are also industry-specific difficulties, including the driver shortage and lack of equipment.”

Bob Costello

Costello

The ongoing driver shortage, which has now been discussed by a U.S. Department of Commerce advisory committee on competitiveness as a serious threat to the economic recovery, continues to impact the industry, Costello said.

For-hire truckload carriers are operating fewer trucks than a year earlier. It is difficult to haul significantly more freight with fewer trucks and drivers, he said.

“In addition to these supply issues, retail sales and housing starts, both large drivers of truck freight, retreated in July, although both rose on a year-over-year basis.”

Trucking serves as a barometer of the U.S. economy, representing 72.5% of tonnage carried by all modes of domestic freight transportation. 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.

ATA’s index is dominated by contract freight as opposed to spot market freight.

Meanwhile, the International Trade Administration’s Advisory Committee on Supply Chain Competitiveness is urging Commerce Secretary Gina Raimondo and other federal officials to lead a widespread effort to address the nationwide shortage of truck drivers, which the panel said has “likely reached an all-time high.”

Raimondo

“The vital common link for domestic operations and distribution among our air, sea and land ports is effective truck transportation,” the committee said in a recent letter to the secretary.

The 45-member panel is endorsing efforts to allow individuals younger than 21 to drive trucks in interstate commerce — currently prohibited by federal law. That provision is part of the infrastructure bill that passed the U.S. Senate earlier this month and is now before the House of Representatives.

In addition, the July Logistics Managers’ Index Report came in at 74.5, the sixth consecutive month the index has been above 70. That’s down a slight 0.5% from June’s 75.

The LMI combines eight components, including inventory levels and costs, warehousing capacity, utilization, prices and transportation capacity. A reading above 50 indicates that logistics is expanding; a reading below 50 is indicative of a shrinking logistics industry.

The DAT Truckload Volume Index also eased, declining 8% in July to 222 compared with June’s 237, the Portland, Ore.-based trucking analytics firm announced Aug. 23.

The drop comes as transportation officials across the country are expressing concerns about the upcoming holiday shopping season and shortages of some items because of shipping delays stemming from the COVID-19 pandemic.

Still at 222, the index is well above the 193 mark from July 2020.

“Shippers not only experienced escalating spot and contract rates in July, they were hampered by port congestion, unloading delays, shortages of trucks and drivers and more recently, tighter intermodal capacity,” said Ken Adamo, chief of analytics at DAT. “With holiday merchandise already arriving at ports, for many shippers there is more freight than the commercial transportation system has the capacity to handle efficiently. All modes are under stress.”

DAT is an aggregated measure of dry van, refrigerated and flatbed loads moved by truckload carriers and an industry-standard indicator of commercial freight activity.

RoadSigns

How much impact does driver pay have in hiring drivers? And what else can fleets do to recruit and retain quality talent? Hear a snippet from DriverReach founder and CEO Jeremy Reymer, above, and listen to the full program at RoadSigns.TTNews.com.

DAT said rates for both contract and spot freight are at record levels.

The national average spot rate for van loads on the DAT One load board network was $2.73 per mile, up 5 cents from June and 70 cents higher year-over-year.

The national average spot reefer rate rose 4 cents to $3.14 per mile, a new all-time high.

The national average spot flatbed rate fell 3 cents to $3.12 per mile, in line with seasonal expectations.

Contract truckload rates again set records for all three equipment types, reflecting what DAT said is “urgency among shippers to secure capacity and reduce volatility in their supply chains.”

The average contract rate for dry vans was $2.79 per mile, up 6 cents compared to June.

The average reefer rate increased 2 cents to $2.90 per mile.

The contract flatbed rate jumped 17 cents to $3.29 per mile.

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