November Tonnage Rises 3.9% In 12th Consecutive Increase

This story appears in the Jan. 3 print edition of Transport Topics.

Truck tonnage hauled increased in November for the 12th month in a row, rising 3.9% above the corresponding month of 2009, according to American Trucking Associations.

ATA’s tonnage index, released Dec. 17, also showed that trucks moved 5.9% more freight during the first 11 months of 2010 than during the comparable period the year before. However, the freight volume did dip slightly on a seasonally adjusted basis from October to November.

The preliminary reading for the ATA tonnage index was 109.7 in November, down from 109.9 in October. The trade group uses business activity in 2000 as a base level of 100.

“Tonnage increased . . . in September and October and I don’t expect volumes to rise every month,” said ATA Chief Economist Bob Costello. “Additionally, the decrease in November is much smaller than the gains during the previous two months,” he said.

Costello said he expected the modest pace of increase to continue through mid-2011, before accelerating during the second half of the year and into 2012.

Fleet executives said the change from a year ago was readily apparent.

“We’re extremely busy. November volume was 18% better, year-over-year,” said Steve O’Kane, president of the A. Duie Pyle Cos. He said volume has grown steadily from September through November and even remained strong through the first three weeks of December. Pyle, West Chester, Pa., is a Northeast regional less-than-truckload carrier that does a lot of work for industrial and manufacturing shippers.

O’Kane said his shippers were doing better across the board and that he expected growth to continue, but not necessarily at a strong rate.

“We’re cautiously optimistic, but our customers aren’t saying, ‘Let the good times roll.’ We’re feeling OK, and there’s a vast improvement over 2009, and we expect to see more in 2011,” said O’Kane. He said that year-over-year comparisons soon will appear smaller, as the bottom of the recession recedes into the past.

“Business is a little better than last year, but it’s not really robust,” said Steve Gordon, chief operating officer of Gordon Trucking, Pacific, Wash. His family’s business has a lot of retailers as customers and handles a lot of imports to West Coast ports that must be distributed in the West and Midwest.

“Generally, our retail business has felt stronger this year, but our general commodities on the industrial side haven’t been as strong,” said Gordon, whose company runs 1,700 tractors in dry van, refrigerated and dedicated contract carriage operations.

Gordon also saw volumes increase from October to November and stay strong into December. When there was a pre-Christmas dip, at least it was not a “nose dive,” he said.

In related economic news, the Commerce Department pegged third-quarter growth in U.S. gross domestic product at a 2.6% annual rate on Dec. 22, a slightly upward revision of its growth estimate for the July-to-September period.

Four days before Christmas, Bloomberg News said same-store sales at a selection of U.S. retailers posted the biggest jump of the holiday shopping season, rising 4.2% above year-ago levels as more consumers finished shopping.

A survey of retailers said almost 74% of shoppers completed gift buying in the week ended Dec. 18, spurring faster sales growth than the previous three weeks. That percentage compared with 56.6% a week earlier, according to a chain-store sales index released by New York-based International Council of Shopping Centers and Goldman Sachs Group, Bloomberg said.

On the industrial side, the Federal Reserve System said its Industrial Production index rose to 93.9 in November after dipping in October. The November reading is the highest level of output since October 2008, when it had the same reading. The Fed’s IP index uses activity from 2007 as a base level of 100.

Also on the less-than-truckload side, while FedEx Freight reported a loss of $91 million for its September-to-November quarter that was mainly due to special charges, quarterly revenue rose 14% from last year, shipments per day increased by 8% and revenue per hundredweight was up 5%.

Gordon and O’Kane both said the volume increases they have seen have been accompanied by improved pricing.

“We’ve seen improving yields, which are much welcome,” said O’Kane. While truckload pricing began recovering in the spring, the LTL side stayed lower longer.

Gordon said he has seen two less obvious linkages. While his company does not haul automotive freight, the rebound in car sales has benefited Gordon Trucking because carriers specializing in automotive work have returned to that business and therefore are competing less with Gordon for nonautomotive shipping.

He also said dedicated contract carriage, a premium service, is more in demand now.

“There was a lot less demand for it when trucking capacity was plentiful, but now, people are more interested in dedicated,” Gordon said.