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October 19, 2021 12:00 PM, EDT

Tonnage Jumps in September

Truck Capacity Remains Tight
Trucks on highway John Sommers II for Transport Topics

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Truck tonnage increased on both a sequential and year-over-year basis in September, recording a 2021 high mark amid an environment in which a shortage of drivers and trucks is keeping rigs fully loaded on most runs, American Trucking Associations reported Oct. 19. 

The ATA For-Hire Truck Tonnage Index was 112.9 in September, an increase of 1.7% compared with year-ago levels, and up 2.4% compared with August’s 110.2 result. For the purposes of the index, the year 2015=100. 

“September’s sequential gain was the largest in 2021,” ATA Chief Economist Bob Costello said. “It is good that tonnage rose in September, but it is important to note that this is happening because each truck is hauling more, not from an increase in the amount of equipment operated as contract carriers in the for-hire truckload market continue to shrink from the lack of new trucks and drivers.” 

Bob Costello

The drivers of truck freight ... are helping keep demand high for trucking services.

ATA Chief Economist Bob Costello

Costello said the industry is short at least 60,000 drivers due to retirements, attrition and other issues. Plus, he noted that capacity among for-hire carriers is constrained as motor carriers park vehicles due to a shortage of drivers to operate them. That’s pushing the tonnage numbers up. 

“The drivers of truck freight, including retail, construction and manufacturing, plus a surge in imports, are helping keep demand high for trucking services,” he said. 
Meanwhile, the DAT Truckload Volume Index dipped 1% to 229 when measured against August, but the September number still was the highest for any September on record.

The DAT Index is an aggregated measure of dry van, refrigerated and flatbed loads moved by truckload carriers each month. DAT said a decline of 7% to 10% is more typical from August to September.

Ken Adamo

Adamo

“Businesses are shipping early and, where possible, by truck in order to make sure they have inventory, but this means using the spot market or higher-priced carriers to cover their loads,” DAT Chief of Analytics Ken Adamo said. “If you’re accustomed to having the right truck in the right place at the right price, you can have one or two of those things but probably not all three.”

DAT said as capacity remains tight, rates continue their upward movement.

The national average rate for van freight on the DAT One load board network increased 9 cents to $2.85 per mile, including a fuel surcharge. This is the fifth time the van rate has reached a new monthly high in 2021. In September 2020, the rate averaged $2.37 a mile. 

At $3.25 per mile, the national average spot reefer rate was up 10 cents compared with August and was 68 cents higher year-over-year. The spot flatbed rate averaged $3.09 a mile, up 1 cent month-over-month, and was 68 cents higher versus September 2020.

The Logistics Manager’s Index in September dipped 1.6% to 72.2 from 73.8 the previous month, and the index has been above 70 for eight consecutive readings and 11 out of the past 13.

The LMI combines inventory levels and costs, warehousing capacity, utilization, prices and transportation capacity. A reading above 50 indicates that logistics is expanding; a reading below 50 indicates a shrinking logistics industry.

The LMI is put together by business and logistics professors at several universities, including Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University and the University of Nevada-Reno, in conjunction with the Council of Supply Chain Management Professionals.

Dale Rogers

Rogers

Arizona State University business professor Dale Rogers is one of the LMI’s authors. He told Transport Topics transportation’s overall capacity is likely to remain tight for several months, even as policy leaders focus on the congestion at the ports of Los Angeles and Long Beach as the most severe problem. 

“There are all sorts of pieces to this, and just looking at the bottlenecks at the Ports of Los Angeles and Long Beach aren’t really going to do a lot,” Rogers said. “You have to address the whole system and the structure of all the pieces, and looking at one thing doesn’t do it.”

According to the Labor Department, one of the challenges of re-energizing the supply chain is the severe shortage of warehouse workers.
The warehouse and transportation industry had a record 490,000 openings in July.

RoadSigns

Research shows that 41% of technicians leave the industry within the first two years. Host Michael Freeze asks, how can technician recruiters and maintenance leaders decrease that percentage? We talked with Ana Salcido of Navistar and Stacy Earnhardt of TMC. Hear a snippet above, and get the full program by going to RoadSigns.TTNews.com.

In anticipation of the holiday shopping season, UPS, FedEx, Walmart, Amazon and several other companies are upping hourly salary rates and adding signing bonuses and other incentives. In the case of Walmart, Target, and Amazon, they’re offering free college tuition and textbooks.

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 total revenue earned by all transport modes, according to ATA. 

UPS Inc. ranks No. 1 and FedEx Corp. is No. 2 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. Walmart ranks No. 3 on the TT Top 100 list of the largest private carriers in North America, and Amazon.com Inc. is No. 22.


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