Tonnage Holds at Record

This story appears in the Oct. 27 print edition of Transport Topics.

Truck tonnage in September held at an all-time high, rising 3.7% from a year earlier and capping the highest quarter on record, American Trucking Associations reported.

ATA’s advanced seasonally adjusted for-hire index held at 132.6, matching the level in August. The third quarter’s 131.9 average reading topped the previous record high of 129.2 set in the fourth quarter of 2013.

Tonnage in the July-to-September period jumped 2.4% from the second quarter and 4% from the third quarter of 2013, ATA Chief Economist Bob Costello said.

“September [economic] data was a mixed bag. On a month-to-month basis, retail sales were down more than expected, factory output was up and tonnage split the middle,” Costello told Transport Topics. “In that sense, it looks pretty good, and I’m not surprised that truck tonnage was between both of those readings and was unchanged.”

Year-to-date, tonnage is up 3.2% from the same nine-month period last year.

The non-seasonally adjusted index, which represents tonnage actually hauled by fleets before seasonal adjustments, increased 1.7% from August, ATA said.

A trucking analyst said that, while less-than-truckload volumes were strong through the third quarter, levels may have flattened slightly in the first few weeks in October.

“Still, shipment levels should remain in positive territory through year-end,” David Ross, an analyst with Stifel, Nicolaus & Co., wrote in an Oct. 17 investors’ note.

“LTL pricing continues to move higher, but it is no longer accelerating,” Ross wrote. “In addition, reported yields are likely to fall short of actual rate increases,

as average [LTL] weight per shipment is growing due to truckload overflow.”

The Cass truckload linehaul index, which measures changes in per-mile truckload linehaul rates, rose 6.7% year-over-year in September and was 2.4% higher than August.

“The same drivers appear to be in force this month, with demand improving and capacity exiting the marketplace at a rapid pace, as this year’s contract rate increases are starting to take effect,” Cass Information Systems reported Oct. 22.

“We are not surprised to see our index continue to post mid- to high single-digit gains and expect this to continue through the fourth quarter,” said Avondale Partners, which publishes the linehaul index with Cass.

Container traffic at the ports of Long Beach and Los Angeles, which make up the largest port complex in North America, rose in September to their highest levels since the recession.

Total traffic at the Port of Los Angeles increased 9% in September to 775,133 TEUs from a year earlier, the strongest month since August 2006.

The neighboring Port of Long Beach reported that its inbound containers increased 10.2% to 339,343 TEUs in September from a year ago. However, exports declined 12.1%.

The ports said the higher volume reflected peak-season volume in advance of the holidays.

On the East Coast, the South Carolina Ports Authority reported volumes jumped 13.4% in September and that containers were 10.3% above its projections for its fiscal year, which began in July.

SCPA handled 150,790 TEUs in September and was “seeing growth in the automotive sector as manufacturers add new lines and exports continue to rise,” SCPA CEO Jim Newsome said in a statement.

Meanwhile, several housing reports released last week indicated continued strong activity in that sector.

Housing starts also jumped, 6.3% in September, to a 10.2 million annual rate, the Commerce Department reported.

In addition, the Labor Department reported Oct. 21 that sales of previously owned homes rose 2.4% in September to a 5.17 million annual rate.

Housing sector “fundamentals continue to look solid,” Gus Faucher, an economist at PNC Financial Services Group Inc. in Pittsburgh, told Bloomberg News.

With consumer spending the key driver of U.S. gross domestic product, making up 70% of GDP, a separate survey showed that consumer confidence rose this month to its highest level in seven years.

The Thomson Reuters/University of Michigan preliminary sentiment index rose to 86.4 in October, the strongest showing since July 2007 and up from an 84.6 reading in September.