Truck Tonnage Rises 0.2% in November; Increase Is Smallest in Nearly Three Years
Truck tonnage in November continued on a slowing growth trajectory, rising just 0.2% last month in the face of still-high inventory and modest economic expansion, American Trucking Associations reported.
The year-over-growth was the slowest since February 2013 and left the industry bellwether index just 2.7% ahead of last year after 11 months.
“With year-over-year gains averaging just 1.2% over the last three months, there has been a clear deceleration in truck tonnage,” ATA Chief Economist Bob Costello said in a statement.
On a sequential basis, the trade group’s advanced seasonally adjusted index declined 0.9% in November from October, settling at 134.3. Despite the recent slow growth, ATA said its October index, after a revision, rose 1.8% to 135.5, which was close to the record of 135.8 set in January.
“Tonnage gave back half of the gain in October,” Costello said, citing weakness in factory output and fracking activity as well as the overstocked inventories.
“Looking ahead, I remain concerned about the high level of inventories throughout the supply chain," he said. "We recently learned that inventories throughout the supply chain and relative to sales rose in October. This will have a negative impact on truck freight volumes over the next few months."
While there was inventory concern in the near term, Costello offered an upbeat longer-term assessment for all of next year.
“I think the industry can do pretty well in 2016,” he said. “I am looking forward to a better year. We see the supply chain clearing some of the inventories.”
“Factories are going to come back,” he added after a weak 2015, when industrial production barely increased.
Costello also believes that capacity could become “a little tighter” in 2016 after a year when it was easier to find drivers and trucks, in part because higher pay attracted new workers.
In addition, he said, some drivers who flocked to the oil fields for higher pay in recent years have returned to over-the-road jobs. That shift occurred as low oil prices drove down energy exploration activity, and the need for drivers and equipment to support that business declined.
The trade group’s not seasonally adjusted index, a measure of tonnage actually hauled in November, fell 7.6% from the October reading and was 2.5% above the November 2014 result.