October Truck Tonnage Up Month-to-Month, Down Year-to-Year
[Stay on top of transportation news: Get TTNews in your inbox.]
Truck tonnage on an annual basis declined for an eighth consecutive month in October but improved slightly on a month-to-month basis, an indication that the industry is still clawing its way through a weak freight environment, American Trucking Associations said.
“After hitting a floor in April, tonnage has slowly and inconsistently improved, but remains 3% below its recent peak in September 2022,” ATA Chief Economist Bob Costello said in a statement accompanying the Nov. 21 release of the federation’s For-Hire Truck Tonnage Index for October. “Despite the monthly gain, truck freight remains soft as it continues to contract on a year-over-year basis.”
The index slid 2.1% year-over-year to 115.2 from 116.3 in October 2022. However, when measured month-to-month the advanced, seasonally adjusted index posted a 1.1% gain. In September, the index equaled 113.9.
Costello said, “It is important to remember that our for-hire truck freight index, which includes both truckload and LTL freight, is dominated by contract freight with minimal amounts of spot market loads. The traditional spot market remains much weaker than contract tonnage.”
Costello
He noted in particular that freight volumes have not returned to pandemic-era levels when the trucking industry saw significant growth as consumers were spending on durable goods and other large items and having them shipped by truck. Consumers have since shifted their habits to a more traditional balance of purchasing goods and spending on services, such as airline tickets, hotels and entertainment.
The federation calculates the index based on surveys from ATA membership. In calculating the index, 100 represents 2015.
Separately, another monthly snapshot of the freight industry’s health also recorded a year-over-year decline in October but saw a moderate sequential gain.
The October Logistics Managers' Index slid 1.7% to 56.5 compared with 57.5 a year ago, but notched a 4.1% month-to-month increase from September’s 52.4 reading.
Rogers
One of the index’s authors, Arizona State University business professor Dale Rogers, said the sequential gain may indicate that the transportation and freight sector is turning a corner. He noted that fourth-quarter freight levels have begun to rise, and the economy is approaching the so-called soft landing that the Federal Reserve Board was aiming for as it raised interest rates in an effort to slow the pace of inflation.
“This marks three consecutive months of expanding rates of growth, which come on the heels of three consecutive months of contraction,” Rogers said. “This is the fastest rate of expansion since January.”
The LMI combines inventory levels and costs, warehousing capacity, utilization, prices and transportation capacity. A reading above 50 indicates that logistics is expanding; a reading below 50 indicates a shrinking logistics industry. The LMI is produced by business and logistics professors at universities including Arizona State University, 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.
Check out Transport Topics' updated Top 50 list of the largest freight transportation companies in the world and explore how these companies are re-evaluating their supply chains. Tune in above or by going to RoadSigns.ttnews.com.
Rogers said one factor that propelled the index in October was upward movement in inventory levels, restoring a moderate level of improvement after five months of contraction.
“Whether increased inventories are temporary bursts of seasonal expansion or the sign of a larger move back towards stronger economic growth remains to be seen,” Rogers said. “What we can say however, is that October’s inventory and overall index scores are a marked step forward for the logistics industry.”
Meanwhile, DAT Freight & Analytics' monthly DAT Truckload Volume Index showed freight volumes rose in October. The report noted that dry van, refrigerated and truckload volumes recorded modest month-to-month increases, and a 2.3% year-over-year increase compared with October 2022. It was the first year-over-year increase for the index since September 2021. The index is an indicator of loads moved in a month, and it showed increases in two of the three categories; the van index increased 3.5% compared with September, while the refrigerated index notched upward by 4.3%. The flatbed index declined by 3.2%.
Of the gains, DAT Chief of Analytics Ken Adamo said, “It’s a positive sign for freight carriers and brokers, but the expectation is for a seasonal bump as opposed to a sustained recovery of volumes and pricing.”
Want more news? Listen to today's daily briefing below or go here for more info:
