April truck tonnage is solid, reports ATA
Truck tonnage remained on a growth path in April according to the American Trucking Associations’ (ATA) Truck Tonnage Index, which was released today.
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Truck tonnage remained on a growth path in April according to the Truck Tonnage Index, which was released today.
The ATA’s advanced seasonally-adjusted (SA) For-Hire Truck Tonnage Index headed up 1.1% from March to April at 112.5 (2015=100), following a 1% (revised from an original estimate of 1.1%) decline in March, which came in at 110.1.
Compared to April 2017, the SA index was up 9.5%. ATA said this increase represents the largest annual increase going back to October 2017. And on a year-to-date basis through April, the SA index is up 8% annually, topping 2017’s 3.8% annual increase.
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, was 109.2 in April, marking a 4.8% decrease compared to March’s 114.7. The NSA is down 17.4% annually.
“Truck freight tonnage remains robust,” said ATA Chief Economist in a statement. “And I don’t think we’ve even seen the traditional spring freight season yet. People are just getting around to buying grills, lawn mowers, and yard tools. Plus, the produce season was also delayed due to a cold snap in early spring. Longer-term, strength in consumption, factory output, and construction should keep truck freight tonnage solid for the quarters ahead.”
Speaking on a recent conference call hosted by investment firm Stifel, Costello said that there are a few drivers of the current solid freight activity, including consumer spending, construction activity, manufacturing activity, and inventory levels throughout the supply chain.
“[L]ooking at the over-the-road TL and LTL markets, I like to look at factory output,” he said. “2018 is shaping up to be the highest level of production since 2007, and 2019 should be the highest on record. If we look at year-over-year growth rates, we're going to go essentially no growth in the sector from 2015 and 2016 to 2.8% growth this year and over 3% growth next year.”
Werner Enterprises President and CEO recently told LM that the current freight market is the strongest he has seen in his 27-year career, adding that when thinking about the strength of the market, seasonality has to be factored into the equation.
“January through March usually being a slower period, and it has been anything but that this year,” he said. “It really…started around mid-year last year and has just continued to build. We saw virtually no drop-off at all from the fourth quarter to the first quarter, with freight activity remaining strong through the year this far. We are very bullish on what we are seeing and very excited.
As for what the key drivers are, Leathers the combination of economic lift and just a stronger economy with capacity still being constrained, both through the combination of ELD (electronic logging devices), and the general driver shortage, as well as inventory levels coming in lower than they have in recent years.
“These things have caused steady demand, which we have not seen in a long, long time,” he said.
About the AuthorJeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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