ATA: Trucking Tonnage Rises Again, Hints at Market Recovery
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Freight tonnage climbed sequentially for the second consecutive month in August, signaling a potential upward trend in the trucking industry, American Trucking Associations reported Sept. 24.
The ATA For-Hire Truck Tonnage Index rose 1.8% to 115.8 from the prior month. The index also showed a 0.7% year-over-year increase compared with August 2023. This marked the second year-over-year gain in the last 18 months, with the other occurring in May.
“August tonnage levels rose to the highest level since February 2023,” said ATA Chief Economist Bob Costello. “Not only does the latest robust gain show freight levels are coming off the bottom, but so does the sequential pattern over the last eight months. Starting earlier this year, every time tonnage falls, it is higher than the previous low. For me, this month-to-month pattern is more important than looking at the year-over-year percent changes since we are at an inflection point in the freight market.”
One freight expert noted that some of the surge could be attributed to cargo movements made in anticipation of a possible strike among U.S. port workers. The International Longshoremen’s Association is threatening a strike of East Coast ports if a new labor agreement is not reached by Oct. 1. The major sticking point keeping the ports and union apart is automation.
RELATED: US Ports Gear Up for Strike as Deadline Nears
“The numbers in the freight at the ports right now is giving somewhat of a false signal that things are great because people are [staging] their imports in anticipation of a strike on the East Coast,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “That doesn’t mean that the economy is rip-roaring.”
He pointed to the Federal Reserve’s recent 50-basis-point interest rate cut as another example that the economy has slowed, as such an aggressive move signals the central bank is trying hedge against a downturn in the labor market. He also noted that recent layoffs and slowing consumer spending show economic growth has slowed.
Dhawan
“The economy is still expanding, but at a much slower rate than it was six months ago,” Dhawan said. “If you project it forward, the slowdown will continue because economies are like a big ship, it does not turn around on a dime. We need to see how the freight numbers come in once September is over.”
In particular, he wants to see how the early cargo movements — and possible policy changes after the presidential election — affect later months.
“There’s always going to be a payback when you get your stuff early — you’re not going to get it in October and November as much,” Dhawan said. “But there is another factor that can keep the freight up artificially, until the end of this year or even until January; the threat of new tariffs on products from China, consumer products. That will make retailers buy it early instead of waiting till March or April. So that can also happen — that effect can happen. But this is an unknown.”
The Cass Freight Index, a measure of shipping activity, found that shipments decreased 1.9% year-over-year to 1.121 from 1.143. The figure also declined 1% sequentially from the 1.110 reported in July. Cass noted these were the smallest declines in 18 months as goods demand slowly increases, paired with slowing capacity additions.
The Logistics Managers’ Index registered a slight sequential decrease to 56.4 for the month compared with 56.5 in July, but this follows four months of consistent growth that indicate a healthy market, said Arizona State University Professor of Business Dale Rogers, an author of the report.
Rogers
“It seems like volume is picking up,” he said. “It feels like this might be a more traditional Christmas holiday than some of the more recent ones. It does seem like things are better. That’s not true in every industry — I’m talking about macro overall. But it feels to me like things are better.”
Rogers views a slight expansion on freight volumes as being preferable so long as that means stability. “It’s not bad to have slow growth with a lot of stability,” Rogers said. “I think slow and steady is better. There are a lot of people that want it to be higher. But I don’t want unpredictability. I want slow and steady.”
The LMI also noted a jump in inventory levels after reporting a contraction over the previous three months.
The index is compiled by researchers at ASU, Colorado State University, Florida Atlantic University, Rutgers University, the University of Nevada-Reno and the Council of Supply Chain Management Professionals. It measures the rate of change on a scale of 100. A reading above 50 indicates the logistics sector is expanding, and below 50 shows a contraction.
ATA calculates its monthly tonnage index by surveying its membership. The feedback primarily comes from contract freight rather than spot market freight. In calculating the index, 100 represents the year 2015.
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