Truck Tonnage Rises in October
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Truck tonnage in October posted the strongest year-over-year gain since just before summer, American Trucking Associations announced, as consumers ramped up early spending in anticipation of a busy holiday shopping season.
The ATA For-Hire Truck Tonnage Index rose to 113 last month, a 1.8% increase compared with October 2020 and a 0.4% improvement compared with the 112.6 result from September 2021. For the three-month period, tonnage has increased a combined 2.9%, noted ATA Chief Economist Bob Costello, in line with a general upswing in economic activity.
“The combination of solid retail sales, inventory rebuilding and generally higher factory output offset some areas of softer freight growth, like home construction, in October,” he said.
Year-to-date, tonnage is up 0.1% compared with the first ten months in 2020.
“Economic growth remains on solid footing, which is good for truck freight volumes going forward,” Costello said. “The largest problem for the industry isn’t the amount of demand, but making sure we have adequate supply. It is good to see that fleets were able to haul more tonnage in recent months in the face of constrained supply.”
Costello
Earlier this year Costello estimated the trucking industry was short more than 80,000 truck drivers. A provision in the recently passed federal infrastructure package creates a training program to prepare drivers younger than 21 to operate Class 8 trucks in interstate commerce.
The ATA tonnage index is dominated by contract freight as opposed to spot market freight. ATA calculates the index based on surveys from its membership and has been doing so since the 1970s.
Two other trucking indexes also reported strong results last month.
The DAT Truckload Volume Index reached an all-time record of 239 in October, compared with 216 a year ago. In September the number was 233.
“Congested ports, intermodal yards and warehouses acted as a drag on the number of loads moved last month,” DAT’s chief of analytics, Ken Adamo, said in the report. “As a result, retailers and online sellers took on higher truckload prices in order to make sure their freight is positioned for success for the November and December shopping period.”
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DAT also said spot rates for the dry van and refrigerated cargo segments are surging. The national average rate for van loads on the spot market rose 3 cents to $2.87 per mile, which includes a fuel surcharge. The average rate has increased for five consecutive months and is up 47 cents year-over-year.
For the sixth consecutive month, refrigerated and flatbed spot rates averaged more than $3.00 per mile. The refrigerated rate inched up four cents per mile to a new high of $3.29 per mile.
Flatbed rates declined by a penny to $3.08 a mile on an annual basis amid a seasonal drop in freight related to construction and heavy machinery.
The monthly Logistics Managers Index survey for October was 72.6, one point above last year’s 71.6.
Rogers
“October’s reading of 72.6 continues the extended run of logistics expansion we have been tracking throughout the year,” said Dale Rogers, a professor at Arizona State University and one of the index authors. “Overall growth has now been over 70 — a level we would classify as significant expansion — nine months in a row and 12 of the last 14.”
Researchers at Arizona State, Colorado State University, Rochester Institute of Technology, Rutgers University and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals, issue the report. The index is a combination of eight unique components that make up the logistics industry, including inventory levels and costs, warehousing capacity, utilization, prices and transportation capacity. The October number was .4 higher than September’s reading of 72.2.
Any reading above 50 indicates that logistics is expanding; a reading below 50 is indicative of a shrinking logistics industry.
The National Retail Federation said nearly 2 million more people are expected to participate in holiday shopping between Thanksgiving Day and Cyber Monday this year, even as consumers have maintained a trend of starting their holiday shopping earlier in the year.
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