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posted on 07 March 2016

Trucking Tonnage Contracting In January 2016

Truck shipments are in contraction year-over-year.

ATA Trucking

The American Trucking Associations' (ATA) trucking index declined 1.4 % in January, following no change during December. In January, the index equaled 132.8 (2000=100), down from 134.7 in December, an all-time high (along with November 2015).

From ATA Chief Economist Bob Costello:

Clearly, 2016 started soft for truck tonnage. There was a deceleration in freight volumes during the second half of 2015 which continued into the first month of 2016.

The winter storms that hit in January likely suppressed volumes some, but by falling 1.4%, I doubt tonnage would have been positive without the storms. So, that tells me that the inventory situation continues to weigh on truck freight volumes. The sooner the supply chain cleans out the excess stocks, the better for trucking.

Truck tonnage index last month

Truck tonnage this month

z truck.jpg

Compared with one year ago, seasonally adjusted tonnage increased 0.0 %.

Econintersect tries to validate ATA truck data across data sources. It appears this month that jobs growth says the trucking industry improved month-over-month (red line). Please note using BLS employment data in real time is risky, as their data is normally backward adjusted significantly.


This data series is not transparent and therefore cannot be relied on. Please note that the ATA does not release an unadjusted data series (although they report the unadjusted value each month - but do not report revisions to this data) where Econintersect can make an independent evaluation. The data is apparently subject to significant backward revision. Not all trucking companies are members of the ATA, and therefore it is unknown if this data is a representative sampling of the trucking industry.

source: ATA

Trucking Conditions Index for November Signals Anticipated Capacity Concerns by Second Half 2016

FTR's Trucking Conditions Index (TCI) measure for November jumped by more than three points to a reading of 8.64, a potential reflection of the improvements expected for truckers in 2016. FTR expects the worry among shippers about tight capacity to grow in the second half of the year, which will strengthen the carrier environment. However, downside risks for carriers could turn this around if freight fails to grow as expected because of weak industrial output.

source: http://www.ftrintel.com/news/latest-tci/index.php

CASS FREIGHT INDEX REPORT

Year over year, freight shipments were essentially flat from last year, just 0.2 percent lower than last January. Sequentially, January was the fourth month in a row that the number of freight shipments declined.

The Association of American Railroads (AAR) reported that carloads were down 20.6 percent, while intermodal loadings fell 11.9 percent over December 2014. The AAR attributed the decline to soft economic conditions in the U.S. and globally. The continued steep decline in energy prices hurt the railroads on several fronts in January.

First, it caused a dramatic decline in coal shipments, one of their primary commodities, as power generating plants continue to shift to less expensive natural gas. Second, a drop in petroleum and petroleum products shipments as oil mining came to a virtual standstill in the U.S. And third, there has been a loss of shipments of materials used in petroleum extraction. Truck tonnage also eroded in January, but not to the same extent as railroads. Carriers are reporting that capacity and demand are very well matched right now.

Source: http://www.cassinfo.com/Transportation-Expense-Management/Supply-Chain-Analysis/Cass-Freight-Index.aspx

Summary

At best, truck shipments are weak. At worst, they are contracting towards multi-year lows. Consider that online retailing is growing, and this is a contradictory sign.



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