Preliminary numbers on the American Trucking Associations' (ATA) June For-Hire Truck Tonnage Index shows a slight downturn in tonnage carried despite the generally robust economic numbers that should fuel freight demand .
According to the ATA, the index declined 0.4% in June, falling to 113 from a revised 113.4 in May. This comes during a month where indicators that typically influence freight, such as industrial production and retail spending, performed relatively well. Since April's impressive surge, truck tonnage has essentially stalled, raising some questions as to whether or not capacity constraints are limiting the tonnage results. The not-adjusted index for June, which doesn't reflect seasonal shifts, was 116.3, 1.1% less than the prior month.
Still, it is worth remembering that tonnage levels and growth remain high despite recent disappointments. Propelled by April's large gain, growth overall for the 2nd quarter was impressive Even with the June decline, the index was up 7.8% from this point last year, and the year-to-date increase for 2018 is 7.9% year-over-year. To put this in perspective, year-over-year growth was 3.8% for the first half of 2017, less than half of the growth experienced so far this year.
Bob Costello, ATA's chief economist, called it "robust growth." “In the second quarter, we saw the tonnage index jump 1.8% from the previous quarter and 8.4% from a year earlier,” Costello said in a prepared statement. “This robust growth fits with what is likely to be a very strong GDP reading for the second quarter. I expect the growth in tonnage to moderate, but remain at very high levels in the months ahead.”
Going forward, tougher comparisons to last year will likely force a gradual slowdown in yearly growth, but the fundamentals for freight demand remain generally strong. Aside from difficulties in the housing sector, most of the key sectors for freight are still expanding, and tonnage should improve in upcoming months despite the recent fits and starts.
The ATA noted that the number is subject to change when a final report is issued, generally around the 10th of the month.