November Tonnage Increases Year-Over-Year, but Declines From October
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Truck tonnage inched up year-over-year in November, but for the second consecutive time declined on a month-to-month basis amid a tepid seasonal environment, American Trucking Associations said with the release of its monthly For-Hire Truck Tonnage Index on Dec. 20.
The index rose 0.8% compared with November 2021 but declined 2.5% compared with October. This followed a 1.2% decline from September to October. In November, the index equaled 114.7 compared with 117.6 in October. In calculating the index, 100 represents 2015.
“For-hire truck tonnage saw the largest single monthly decrease in November since the start of the pandemic and a total drop of 3.7% in October and November,” ATA Chief Economist Bob Costello said in a statement. “The decreases match anecdotal reports of a soft fall freight season, as well as a slowing goods economy generally. Housing-related freight is particularly weak.”
The year-over-year increase was the 15th consecutive such gain but also was the smallest increase over that period. In October, the index was up 4% from a year earlier. Year-to-date through November, tonnage is up 3.7% compared with the same period in 2021.
ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight.
The federation calculates the tonnage index based on monthly surveys from its membership.
For-hire truck #tonnage dropped 2.5% in November -- the single largest monthly decrease since the start of the pandemic. This matches anecdotal reports of a soft fall freight season and a slowing goods-economy generally, where housing-related #freight is particularly weak.— American Trucking (@TRUCKINGdotORG) December 20, 2022
Separately, the Logistics Managers Index also showed a slowing economy. The November LMI registered 53.6, down from last November’s strong 73.4 and off 3.9% from October’s 57.5. This is the third of four months that the LMI has had a reading below 60. A reading above 50 indicates expansion, while one below 50 indicates contraction.
“The slowdown in the overall index is largely due to the long-anticipated wind-down in inventories,” Arizona State University business professor Dale Rogers said when the LMI report was released. “This is indicative of two things: the movement of goods downstream toward retailers, and the sale of those goods as holiday spending picks up.
“Spending growth remained strong to kick off the holiday season. Online consumers spent just over $35 billion during the period from Thanksgiving to Cyber Monday. This shows a significant level of growth from 2021, although it should be noted that ‘buy now, pay later’ transactions were up considerably — perhaps underlying the ongoing inflation issues.”
Researchers at 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, compile the figures every month and issued the report Dec. 13.
The index is a combination of eight unique components that make up the logistics industry, including inventory levels and costs, warehousing capacity, utilization, prices and transportation capacity.
In an interview with Transport Topics, White House Supply Chain Envoy Stephen Lyons said he believes the economy is showing signs of stabilizing and the wild COVID-19 pandemic swings appear to be settling down, and that could explain why transportation indexes are slowing.
“I think the consumer demand will stay. I think imports will stay and continue to grow. I think the supply chain will continue to normalize itself and build back a level of reliability,” Lyons said. “Now, how much resiliency gets built back in there will largely depend on how much various stakeholders want to invest … I see a positive 2023 coming about.”
Meanwhile the Cass Freight Index level of 1.201 in November also declined 0.5% when measured against October’s 1.224.
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“After some noise in recent months related to comparisons and other temporary factors like repositioning mistimed inventory, and consumers getting ahead of rising interest rates, freight volumes settled back to a flattish level in November versus a year ago,” the report said. “Still a very stable environment overall, but still one with many headwinds.”
DAT Freight & Analytics operates the DAT One truckload freight marketplace. Its Truckload Volume Index in November for van freight was down 9.5% to 218 when compared with October and 4.4% lower than a year ago. The refrigerated TVI was 170, 4.5% lower than in October and down 5% year-over-year.
At 218, the flatbed TVI fell 11% compared with October but was 13% higher than a year ago.
“There was seasonality in the van and reefer markets around the Thanksgiving holiday, but also a surge in volume in major intermodal ramp markets like Los Angeles, Chicago and Kansas City,” DAT Chief of Analytics Ken Adamo said. “Shippers used the spot market to reduce the risk of disruptions ahead of a potential rail strike.”
DAT said that in November the spot van rate fell 5 cents to $2.38 per mile, a 55-cent decline year-over-year, while the average refrigerated rate was $2.80 per mile, down 1 cent month over month and 65 cents lower than in November 2021. The average flatbed rate was $2.82 per mile, 6 cents lower than the October average and down 24 cents from a year ago.
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