Two recently released indices show that June continued the trucking market’s climb from its low levels of April. The ACT For-Hire Trucking Index in June climbed to 70.4, up from 50.2 in May. in April, it was 19.3.
Although the June number was more than three times that of April, that does not mean that volumes are three times that of April. Rather, ACT Research sets a base number of 50 and changes in the data are then expressed as an index, with 50 viewed as neutral to flat. For example, the capacity index for June was “steady” at 50, ACT said.
“The survey confirmed much of what we witnessed in rate data over the course of June, as the supply-demand balance tipped in truckers’ favor as the economy reopened,” Kenny Veith, the company’s president and senior analyst said in a prepared statement released with the data. “While encouraging, we would note some transitory risks, one being the economic strength in May and June was heavily subsidized by Congress and the Federal Reserve. Additionally, June’s strong rates benefited from parked trucks and laid-off driver capacity.”
“The strong rebound in freight volumes from April’s trough underscores the rapid move in freight rates, as the market moved from too little to too much freight relative to available capacity,” Veith said in his prepared statement. “The path on rates from here will be largely determined by the economy’s ability to hold the line on freight volumes.”
The numbers released by ACT Research are preliminary. The final numbers are expected to be released in early August.
ATA numbers post an increase
Meanwhile, the seasonally adjusted For-Hire Truck Tonnage Index of the American Trucking Associations (ATA) was up 8.7% in June after a 1% decline in May, when it stood at 106.1. The index in June was 115.3. That index has a base of 100, set against activity in 2015.
The ATA has said that its index is predominantly based on contract freight movements rather than spot markets. As for pricing, after a sharp decline in May, the pricing index for June was 65.2.
The not seasonally adjusted index, which the ATA says represents “the change in tonnage actually hauled by fleets before any seasonal adjustment,” was at 115.5, up 5.2% from May.
The seasonally adjusted June numbers for the ATA index were less than a year ago, down by 1.3%. However, that year-on-year decline is the smallest of the last three months. The year-to-date tonnage index figure compiled by the ATA is down 2.4% from 2019.
Bob Costello, ATA’s long-time chief economist, described the June number as “robust. While the gain in June was the single best month since January 2013, the solid gain was not enough to put tonnage back to pre-pandemic levels, but it is close,” he said in the ATA’s prepared release. “I am hearing good anecdotal freight reports for July, but I am concerned that freight could slow as more states reinstate restrictions due to increasing coronavirus cases.”