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February 23, 2021 12:00 PM, EST

Tonnage Dips 2.1% Year-Over-Year in January

Trucks on highwayJohn Sommers II for Transport Topics

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January truck tonnage fell 2.1% compared with year-ago levels but ticked up 1.4% over December 2020 in a continuation of several months of sequential gains, American Trucking Associations announced.

“Over the last four months, the tonnage index has increased a total of 3.3%, which is obviously good news,” ATA chief economist Bob Costello said in a release Feb. 23.

The ATA For-Hire Truck Tonnage Index equaled 114.6 in January on a seasonally adjusted basis, compared with 117.4 in January 2020, and with 113.1 in December. (The index equaled 100 in 2015.)

Bob Costello

Costello

Costello said the next few months will be measured against comparisons to the early, volatile days of the coronavirus pandemic but could be lifted by ongoing efforts to combat the virus’s blow to the nation’s economy.

“The index is still off 2.8% from the high in March as tonnage plunged 9% in April alone,” he said. “I continue to expect a nice climb up for the economy and truck freight as we get more economic stimulus and increased vaccination numbers.”

In March, the index reached a high of 120.4.

In an interview with Transport Topics, Costello said he expects economic activity to accelerate more toward the second half of the year and projects the U.S. Gross Domestic Product could grow by 5% for the year.

But he cautioned that opportunities for trucking could vary by sector.

“It’s a more complex formula for trucking,” Costello said. “There are parts of trucking that haven’t been doing so well that will improve. For example, tank trucks. There will be more gas, more energy used as we drive more. But our ratio of goods to services will go back toward services, and that will impact trucking.”

Costello estimated that further stimulus spending and broader vaccinations would stabilize the economy and bring more balance to trucking, which has seen a surge in goods shipped as e-commerce has boomed during the pandemic.

“I do think the economy is going to accelerate because of more vaccinations and the added stimulus,” Costello said.

The not seasonally adjusted index, which represents the tonnage change actually hauled by the fleets before any seasonal adjustment, equaled 107.4 in January compared with 117.3 a year ago and 4.5% below the December level of 112.4.

The truck tonnage index is dominated by contract freight, as opposed to spot market freight. ATA calculates the index based on surveys from its membership and has been doing so since the 1970s.

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, according to ATA. 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.

Meanwhile, the January Logistics Manager’s Index Report showed the trucking industry is starting 2021 strong.

The LMI was 67.2, up significantly from the January 2019 reading of 54.1. The result is also up .5 from December’s 66.7.

Dale Rogers, economics professor at Arizona State University and one of the report’s authors, said capacity in the trucking and logistics industries remains very tight, and business remains strong.

“The logistics capacity crunch continued in January,” Rogers said. “Much of this tightness can be observed in the glut of traffic currently sitting in U.S. ports. Ports in Georgia saw a 25% increase in traffic in November and December — a double-digit increase in January — and expect volume to remain high at least through February.”

The LMI is calculated using an index, in which any reading above 50% indicates that logistics is expanding; a reading below 50% is indicative of a shrinking logistics industry.

Meanwhile, the monthly DAT Truckload Volume Index showed mixed results in the trucking industry across different equipment types, as rates and volume levels appear to have reached a plateau.

The index is a measure of dry van, refrigerated and flatbed loads moved by truckload carriers, and was up 7.5% year-over-year in January but down 2% when measured against December 2020.

“Spot market volumes and rates fell from record-setting levels at the end of December, and our models predict a continued decline into the second quarter,” said Ken Adamo, DAT chief of analytics. “The headwind of COVID-19 is mixing with the tailwinds of vaccine distribution and economic stimulus. There’s still uncertainty about whether consumers will continue to spend, what they’ll buy now, and how networks will respond as e-commerce drives more final-mile delivery and fulfillment houses to move closer to where customers live.”

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