January Truck Tonnage Increases 1.5% Year-Over-Year
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Truck tonnage rose 1.5% in January and maintained the steady, positive pace on which it ended 2022, according to American Trucking Associations’ For-Hire Truck Tonnage Index.
“Tonnage has increased nicely in the last couple of months,” ATA Chief Economist Bob Costello said in a Feb. 21 news release. “I suspect that some of the gain is attributable to capacity coming out of the network, especially those carriers that primarily operate in the spot market and/or bought expensive used equipment in the last couple of years.
“This would push more freight to contract carriers, which dominate this index. It could also be that freight bottomed and is coming up a little, too. So, the gain is likely a little higher demand and a little less supply.”
On a monthly basis, the index rose 0.7% in January after increasing 1% in December.
The index measured 117.1 last month, compared with 116.2 in December. The index measured 115.3 in January 2022. In calculating the index, 100 represents 2015.
The January year-over-year gain marked the index’s 17th consecutive annual increase.
Despite the modest gains in December and January, tonnage is off 1.4% from its recent high in September.
Speaking earlier this month at the Recruitment & Retention Conference hosted by Conversion Interactive Agency, Costello said the possibility remains that the U.S. economy will slip into a mild recession in 2023, but he believes the freight industry will weather the downturn.
NEWS: Truck tonnage rose 0.7% in January, building upon the 1% gain in December.— American Trucking (@TRUCKINGdotORG) February 21, 2023
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ATA calculates its monthly tonnage index based on surveys from its membership, and has been doing so since the 1970s.
Meanwhile, another index that closely follows the trucking, freight, warehouse and transportation industries, the Logistics Managers Index, declined in January when measured against 2022’s strong number during the pandemic, but increased from December.
January’s LMI was 57.6, down from the 2022 figure of 71.9, but higher than December’s 54.6. This marks the second consecutive overall increase. The index’s authors indicated that back-to-back rates of growth are notable as they come after a run of seven of eight months of declining growth.
The economists who compile the LMI believe the economy still is strong.
“The big U.S. economic news in January was the 517,000 jobs that were added. This came a surprise to some given the high-profile rounds of layoffs occurring at places like Microsoft and FedEx,” Dale Rogers, professor of business at Arizona State University, said in the report. “The losses in tech were more than made up for by gains in other areas — including the transportation and warehousing sectors, which added 23,000 workers in January.
“The Fed hinted that by slowing down the pace of rate increases they will give the economy time to catch up to the corrections they have already attempted to install, thereby avoiding the dreaded overcorrection. Much of the decrease in inflation is due to falling prices in products like food, energy and housing, all of which are particularly impactful to consumers.”
Every month, researchers at 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, assemble the report. Any reading of the LMI calculated above 50 indicates the logistics sector is expanding; a reading below 50 indicates a contraction.
From our latest Truck Volume Index report: “After a gangbusters January last year, truckload rates followed a more typical pattern and volumes were remarkably steady," and fuel prices were at their lowest since February 2022.#Trucking #Freight— DAT Freight & Analytics (@datfreightteam) February 21, 2023
Link: https://t.co/VsF898yQEP pic.twitter.com/6L91QbKqYh
DAT Analytics, based in Beaverton, Ore., said its DAT Truckload Volume Index hit new highs in January, confirming that trucking is still growing, despite some economists’ fears of a possible recession.
DAT said that at 223, the Truckload Volume Index for van freight is 2.8% higher than in December and up 2.8% year over year. The refrigerated TVI is 174, 3% higher than in December and up 3.6% year-over-year. Flatbed TVI is 218, up 10.7% compared with December and 12.4% higher year-over-year.
“Volatility gave way to seasonality last month,” DAT Chief of Analytics Ken Adamo said. “After a gangbusters January last year, truckload rates followed a more typical pattern and volumes were remarkably steady this year.”
DAT said its TVI reflects the change in the number of loads with a pickup date
during that month; the actual index number is normalized each month to accommodate any new data sources without distortion. A baseline of 100 equals the number of loads moved in January 2015.
U.S. Bank’s fourth-quarter Freight Payment Index showed the volume moved by truck in the peak shipping season of 2022 dropped by the largest year-over-year level since the pandemic.
The index showed that Q4 truck freight shipments contracted 7.1% year-over-year. That’s the largest drop since Q3 2020 and down 4.6% compared with the third quarter of 2022.
The slowdown was driven by a significant contraction in the West, where volumes dropped 8.9% year-over-year and 10.6% compared with the third quarter.
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