Truck Tonnage Rises Slightly in June
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Truck tonnage in June inched up 0.5% compared with year-ago levels, a slowdown compared with recent months amid a tempering of freight activity nationwide, according to American Trucking Associations’ For-Hire Truck Tonnage Index. The index equaled 111.6 in June, ATA announced in a July 20 news release. When measured against May, the index decreased 1.5%. For purposes of the index, the year 2015=100.
“Tonnage has definitely flattened out, on average, over the last six to nine months,” ATA Chief Economist Bob Costello said. “The good news is that it remains slightly above 2020 levels.”
Costello noted, however, that there are post-pandemic supply chain and economic challenges — some specific to trucking — that are limiting growth.
“Supply chain issues are likely putting some downward pressure on tonnage,” he said. “But it is also likely that tonnage isn’t growing as much as it could because of industry-specific supply constraints. This index is dominated by contract freight, and the for-hire truckload carriers have seen their tractor counts fall because they are having difficulty finding qualified drivers.
“It is difficult to move more tonnage with less equipment, which is why we are seeing strong volumes in the spot market as shippers scramble to get loads moved.”
Year-to-date, tonnage is up 0.3% compared with the first six months of 2020. ATA calculates the tonnage index based on surveys from its membership.
Other industry indexes and observations from economists point to an economy that is growing, but concerns are rising over the spread of the COVID-19 delta variant and what impact it may have if vaccination rates do not improve.
DAT Freight and Analytics said July 21 freight volume reached new highs in June, and both spot and contract rates remained in record territory as a surge in retail imports and the peak of summer agriculture shipments propelled demand for transportation services.
In June, the DAT Truckload Volume Index jumped 11% to 237 when measured against May — a record number for the index.
The index is an aggregated measure of dry van, refrigerated and flatbed loads moved by truckload carriers, and an indicator of commercial freight activity (100=2015).
Rates remain at record levels. The average national rate for van loads was $2.68, down 1 cent from the record high in May, DAT said. Refrigerated freight also dropped one penny to $3.10 a mile, while flatbed freight saw a 3-cent increase to $3.10 per mile.
Contract truckload rates set records for all three equipment types. The average van rate was $2.73 per mile, up 6 cents compared with May. The contract reefer rate increased 3 cents to $2.88 per mile, while the flatbed rate jumped 7 cents to $3.10 per mile.
DAT Chief of Analytics Ken Adamo said in June shippers faced a supply-driven capacity crunch. “While the number of trucks posted to the DAT load board network increased significantly in June, overall demand accelerated at a faster pace. The typical seasonal decline in contract and spot rates from now to Thanksgiving looks less likely in 2021,” he said.
DAT said there are encouraging signs regarding employment growth in the transportation sector. According to the U.S. Labor Department, even as trucking capacity remains tight, there are signs that workers are returning to the industry with 24,500 new transportation jobs added in June.
Economist Rajeev Dhawan, the director of the economic forecasting center at Georgia State University in Atlanta, said the overall economy performed at a solid level during the second quarter of 2021. However, he fears further supply chain interruptions if the COVID-19 delta variant continues to rapidly spread — especially in parts of Asia, where vaccination levels remain low and where thousands of factories that supply millions of dollars of goods to U.S. consumers operate.
“Supply chains are very intertwined, and if you have an outbreak in any of the ports in Asia like we did in June in China, that means the port movement goes down 40-60% and it shows up in our ports a month later and our warehouses six weeks later,” he said. “Remember, you can only get products you buy in a day or two here if there are items in the warehouses.”
Like the DAT Truckload Volume Index, the Logistics Managers Index in June performed at a record level.
The index came in at 75.0, the second-highest in its history, compared to 51.7 in the same month a year ago. It also marked the fifth consecutive month the index has come in above the 70-point mark, which is the longest streak in its history. The index’s authors also said the second quarter of 2021 set a record for a three-month moving average, coming in 73.6, suggesting the fastest growth rates in the LMI’s five-year history.
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