The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 3.0% in October, marking the fourth consecutive month-to-month drop. The index fell 0.8% in September and 1.9% in August. In October, the seasonally adjusted tonnage index equaled 108.9 (2000 = 100), its lowest level since October 2003. The not seasonally adjusted index increased 3.4% to 119.9 in October.
The seasonally adjusted index declined 1.8% compared with October 2007.
ATA Chief Economist Bob Costello said that truck tonnage is down a total of 6.3% in the last four months, highlighting how bad the US economy is currently. “October should be the busiest month of the year, but instead this October was a fizzle,” said Costello. October is typically a busy month for motor carriers as retailers begin to take delivery of products for the holiday season. “The latest truck tonnage drop suggests that retailers are very pessimistic for the holiday sales season,” Costello added.
Costello noted that there has been a leveling off of the traditional fall freight season for trucking companies in recent years, where more freight is delivered in November and December, but that this October was particularly weak due to the economic recession. “The cumulative drop in truck tonnage over the last four months suggests that the economy is likely to contract substantially in the fourth quarter, at least three%.”
Note on the impact of trucking company failures on the index: Each month, ATA asks its membership the amount of tonnage each carrier hauled, including all types of freight. The indexes are calculated based on those responses. The sample includes an array of trucking companies, ranging from small fleets to multi-billion dollar carriers. When a company in the sample fails, we include its final month of operation and zero it out for the following month. This assumes the remaining carriers pick up that freight. As a result, it is close to a net wash and does not end up in a false increase. Nevertheless, some carriers are picking up freight from failures, and it may have boosted the index. Due to our correction mentioned above, however, it should be limited.
Trucking serves as a barometer of the US economy, representing nearly 70% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods.
Trucks hauled 10.7 billion tons of freight in 2006. Motor carriers collected $645.6 billion, or 83.8% of total revenue earned by all transport modes.
ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 10th day of the month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.