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July 21, 2020 12:00 PM, EDT

June Tonnage Dips 1.3% Year-Over-Year

However, ATA's For-Hire Index Jumps 8.7% From May
Trucks on highwayYear-to-date, tonnage is down 2.4% compared with the first half of 2019, according to ATA. (John Sommers II for Transport Topics)

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Truck tonnage in June declined 1.3% when compared with year-ago levels, but on a monthly basis surged 8.7% above May, American Trucking Associations reported July 21.

The seasonally adjusted ATA For-Hire Truck Tonnage Index registered 115.3 last month compared with 116.8 a year ago.

Year-to-date, tonnage is down 2.4% compared with the first half of 2019, ATA said.

“Not surprisingly, as more states lifted restrictions in June, truck tonnage was robust,” ATA Chief Economist Bob Costello said in a statement, noting that while the sequential gain over May was the best monthly improvement since January 2013, it was not enough to return tonnage to pre-pandemic levels.

ATA's Bob Costello

Costello

“But it is close,” he said.

Looking ahead, Costello said, “I am hearing good anecdotal freight reports for July, but I am concerned that freight could slow as more states reinstate restrictions due to increasing coronavirus cases.”

Several densely populated states, including California, Texas, Florida, Arizona and Georgia, have seen a spike in COVID-19 cases. Governors and mayors in some of those states are imposing curfews or tightening restrictions on businesses to slow the spread of the virus.

ATA’s not seasonally adjusted tonnage index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, equaled 115.5 in June, 5.2% above the May level of 109.8. In calculating the index, 100 represents 2015. ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight.

Trucking serves as a barometer of the U.S. economy, representing 72.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.84 billion tons of freight in 2019. Motor carriers collected $791.7 billion, or 80.4%, of the total revenue earned by all transport modes.

Meanwhile, the Cass Freight Index showed June’s freight increase couldn’t be called a comeback. The index was .971, which was down 17.8% from last June’s 1.18. But month-to-month, the index was up 3.5%.

“The Cass Freight Index showed sequential volume improvement again in June, although freight volumes remain well below year-ago levels and also below pre-pandemic levels,” the report said. “In our view, U.S. freight volumes will not return to 2019 levels until 2021 at the earliest. Given the most recent Cass readings, there is still a wide gap to bridge.”

The Cass Truckload Linehaul Index measures the per-mile linehaul rates and looks at the largest markets in the domestic transportation landscape. The index declined 5.9% year-over-year in June, and it posted a 5% drop in May.

However, rates are increasing and are up 9.8% year-over-year, including fuel surcharges in the dry van market. Refrigerated rates are up 4.6%, and flatbed rates are down 4.4% year-over-year.

“We believe the spot market, as well as the contract market, has bottomed and that the rebound in rates … will depend on the strength of the recovery coupled with the pinch of industry supply from factors besides just truck production,” the monthly report said.

DAT Freight and Analytics said its June Truckload Volume Index, which is a measure of dry van, refrigerated and flatbed loads moved by trucking companies, increased 9.4% from June 2019 and 13.7% from May.

“The surge we’re seeing in rates and volumes are consistent with summer trends, but consumer habits continue to be impacted by COVID-19,” DAT Chief of Analytics Ken Adamo said in a statement. “For instance, there’s been an early surge in demand for pressure-treated lumber, as people tackle home improvement projects. But growers are contending with soft restaurant demand as states reopen at different speeds with different rules.”

DAT also is cautiously optimistic about the state of the trucking industry and the overall economy.

Adamo said that the Fourth of July marks the beginning of the back-to-school shopping season, which will result in an increase in freight at warehouses. He said signs also are positive for the flatbed market, with a significant rise in suburban single-family home construction, which is freight-intensive because of the full range of materials needed.

However, as those populated states battle a significant increase in COVID-19 cases, Adamo said that could slow the economy in the coming months.

“There’s clearly pent-up demand in the economy, but the recent surges in COVID-19 cases remain a complicating variable for consumer behavior this summer,” he said. “Retail and consumer packaged goods volumes are way up, but manufactured goods are way down.”

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