Tonnage in April Rises 6.9% Year-Over-Year
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Truck tonnage in April increased a seasonally adjusted 6.9% compared with year-ago levels, according to American Trucking Associations’ For-Hire Truck Tonnage Index.
The monthly index, released May 18, equaled 114.7 in April, compared with 107.2 in April 2020. (The index equaled 100 in 2015.)
When measured against March 2021, April tonnage declined 0.3%. In March, the index equaled 115.1.
ATA Truck Tonnage Index Decreased 0.3% in April, from March, but surged 6.9% from a year earlier. https://t.co/1vRnVwhMGj
— Bob Costello (@ATAEconBob) May 18, 2021
ATA Chief Economist Bob Costello believes both the trucking industry and the overall U.S. economy are poised for very strong summer and fall seasons as the country returns to pre-pandemic levels of activity, with sectors including home construction, manufacturing and retail all poised for growth.
“The index increased on a year-over-year basis for the first time since March 2020,” Costello noted of the April result. “Part of the reason for the gain was due to an easy comparison when the index fell significantly in April 2020. But I’m expecting increases — albeit smaller than April’s — on a year-over-year basis going forward.”
Costello and other economists are forecasting that the U.S. economy will see Gross Domestic Product gains of more than 9% in the second quarter and more than 7% in the third and fourth quarters, and of about 6.7%. for the year. Still, he and others are increasingly concerned about the growing driver shortage as freight volumes tick up.
“Trucking’s biggest challenges are not on the demand side, but on the supply side — including difficulty finding qualified drivers,” Costello said. “I would be shocked if the driver shortage number of 61,000 that we saw in 2019 doesn’t go up. It boils down to demographics and lifestyle. You have a high average age of drivers, you can’t drive interstate freight until you’re 21 and we miss out on people coming out of high school who don’t go to college or into the military.”
Another trucking industry index found conditions in April were strong, albeit slightly below a record-setting March. The DAT Truckload Volumes Index registered 225 in April, down 5% from an all-time high in March. The index is an aggregated measure of dry van, refrigerated and flatbed loads moved by truckload carriers. A baseline of 100 reflects freight volume in January 2015.
[News Release] The April Truckload Volume Index was 39% higher than it was in April 2020 and April 2018, and 26% higher than in April 2019, indicating unusually strong demand for truckload capacity last month.
— DAT Freight & Analytics (@LoadBoards) May 17, 2021
Read more: https://t.co/Pb3swc6r1s
“It’s not unusual to see a decline from March to April, but truckload freight activity remained at historic levels compared to previous years,” DAT Chief of Analytics Ken Adamo said. “The April TVI was 39% higher than it was in April 2020 and April 2018, and 26% higher than in April 2019, indicating unusually strong demand for truckload capacity last month. Trucking companies are in the driver’s seat with respect to pricing power.”
The monthly Logistics Managers Index also entered record territory in April, coming in at 74.5 for its second-highest reading ever. The report is authored by business and logistics professors from Colorado State University, Arizona State University, Rutgers University, Rochester Institute of Technology and the University of Nevada-Reno.
“This is a sharp turn from this time last year, when the April 2020 LMI read in at a record-low 51.3 when prices were low and a high level of slack capacity was available due to the COVID-19 lockdown,” the authors said in a statement. “Consumers are continuing to rely heavily on methods of shopping they grew accustomed to during lockdown. These channels of consumption tend to require a greater number of trucks and more expansive warehouse networks than more traditional alternatives.”
They added, “Going from the lowest LMI reading on record to the second-highest seems to capture the sensation of whiplash being felt by many in the industry.”
Meanwhile, the U.S. Bank Freight Payment Index, a quarterly analysis of national shipments and spending, showed that shipments in Q1 2021 contracted 8.3% after increasing a combined 11.3% in the third and fourth quarters of 2020.
We sat down with @ScottWLuton and @gregoryswhite from @_supplychainnow to discuss the latest U.S. Bank Freight Payment Index. Listen and subscribe wherever you get your podcasts.https://t.co/0FiZ75tWUc pic.twitter.com/rHsWQpDmtq
— U.S. Bank Payments (@USBankPayments) May 16, 2021
“The freight industry hit an economic recovery ‘speed bump’ during the first quarter,” U.S. Bank Vice President Bobby Holland said. “Winter storms, supply chain disruptions and a continued driver shortage all contributed to tight capacity. However, headed into the spring and summer, with many Americans vaccinated, government stimulus and increased economic reopening, we anticipate increased spending and increased factory output — leading to rising freight volumes.”
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