Tonnage Drops in April Despite Optimism Among Trucking Execs
Truck tonnage fell 1.8% in April compared with 2016 levels despite fleets generally reporting positive conditions in the month, according to the latest monthly data from American Trucking Associations.
“I have to admit that April’s contraction is a bit surprising, especially considering the anecdotal reports I’ve been hearing from fleets regarding freight levels,” ATA Chief Economist Bob Costello said. “It’s not necessarily that tonnage levels fell in April that is surprising but the size of the decrease. One explanation is that housing starts fell substantially in April as well, and residential construction generates heavier truck freight.
On a sequential basis, the seasonally adjusted index slipped 2.5% in April, the second straight monthly decline. The preliminary seasonally adjusted index was 134 in April, down from 137.4 in March. The all-time high in February 2016 was 142.7. The index uses a base level of 100 for freight activity in the year 2000.
The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets, was 132.6 in April, which was 7.8% below the March level.
ACT Research Co.’s For-Hire Trucking Index was lower in April on a sequential basis but significantly higher than the levels during the same month in 2016. The index is derived from a survey of trucking companies, and 50 is the dividing line between expanding or contracting economic conditions.
The volume index was 61, down from 71.1 in March but up from 46.3 in April 2016. The pricing index was 59.6, down from 64.8 in April but up from 48.1 a year ago. The capacity index was 54.4 in April, lower than the 54.7 in March but higher than the 53.8 last year. The productivity index was 52.9, down from 61.7 in March but better than the 45 in April 2016.
Jim Meil, principal for industry analysis at ACT Research, said that the data correspond to some positive indicators in the economy, particularly for flatbed freight.
“The manufacturing sector is showing some good numbers," he said. "Industrial production and the purchasing managers index is pretty good. Home sales are doing well. The residential sector is coming back. Capital goods and machinery numbers are improving, too. The energy sector is also coming back.”
Nevertheless, Meil described the mood in trucking as better but not good because there are still more trucks than available freight, tipping the supply-and-demand curve away from carriers.
“For example, the pricing numbers are pretty good, but in 2014, a very good year for carriers, every month had an index reading between 60.9 and 68.8. So we’re in a better environment than last year, but it’s still an early stage and some will still wonder whether it’s noise or the real deal,” he said.
“Despite the fact that tonnage is down a total of 3.6% over the last three months, I still expect moderate growth going forward as key sectors of the economy continue to improve slowly,” Costello added.
