Truck tonnage volumes see modest gains, reports ATA

Truck tonnage volumes for the month of December—and calendar year 2019—were mostly up, albeit at tempered levels, according to data issued today by the American Trucking Associations (ATA).

The ATA’s advanced seasonally-adjusted (SA) For-Hire Truck Tonnage Index for December—at 118.2 (2015=100)—topped November’s 113.6 reading by 4% after a 3.4% decline from October to November. And compared to December 2018, it was up 3%, reversing November’s 2% annual decline.

For calendar year 2019, ATA reported that SA tonnage was up 3.3% over 2018, which was roughly half of the annual gain seen from 2017 to 2018, but still up for the tenth consecutive year.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment and the metric ATA says fleets should benchmark their levels with, came in at 112.7 (2015=100) in December, which was 2% off from November’s 115.1 reading.

ATA officials said that the organization’s tonnage data is “dominated by contract freight,” which they have often observed is performing significantly better than what a called a plunge in spot market freight in 2019.

“Last year was not a terrible year for for-hire truck tonnage, and despite the increase at the end of the year, 2019 was very uneven for the industry,” said ATA Chief Economist Bob Costello in a statement. “The overall annual gain masks the very choppy freight environment throughout the year, which made the market feel worse for many fleets. In December, strong housing starts helped advance the index forward.”

Robert W. Baird & Co. analyst Ben Hartford observed in a recent research note that trucking demand trends were still sluggish into the fourth quarter with contracts continuing to describe peak season expectations as more “muted” and certainly less robust than late 2018's tariff-fueled frenzy.

And on the spot market side, he noted that pricing data was mostly soft and consistent with weak truckload fundamentals throughout 2019.   

Former Celadon CFO Thom Albrecht explained on a recent Webcast hosted by TranzAct Technologies, CSCMP, and NASSTRAC that up until around mid-2019, roughly 80%-to-85% of the things carriers had been experiencing was due to the infusion of supply and what he called a modest downtick in demand, with demand becoming more uncertain in recent months.

Signs of declining demand have also been evident in manufacturing data points issued by the Institute for Supply Management, which Albrecht said serves as a future gauge of freight production. ISM reported in early September that its key manufacturing reading, the PMI, was below 50 (a reading of 50 or higher indicates growth is occurring) for the first time since August 2016, with new orders, the most direct indicator of demand, negative for the first time since December 2015, snapping a 43-month stretch of growth at the time.