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posted on 24 December 2019

Trucking Industry Growth Remains In Contraction In November 2019

Written by Steven Hansen

Headline data for the American Trucking Association (ATA) and the CASS Freight Index reported the year-over-year growth rate continues in contraction.

Analyst Opinion of Truck Transport

The CASS index is inclusive of rail, truck, and air shipments. The ATA truck index is inclusive of only trucking industry member movements (ATA's tonnage data is dominated by contract freight).

I tend to put a heavier weight on the CASS index which continued in contraction year-over-year.

Econintersect tries to validate truck data across data sources. It appears this month that the truck employment rate of growth continues to slow. Please note using BLS employment data in real-time is risky, as their data is normally backward adjusted (sometimes significantly).

ATA Trucking

American Trucking Associations' advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index decreased 3.5% in November after falling 0.7% in October. In November, the index equaled 113.5 (2015=100) compared with 117.6 in October.

Said ATA Chief Economist Bob Costello:

It's tough to sugar coat November's reading. It was the third decrease in the last four months and the index is down 7.2% since July. Additionally, November was the first month to see a year-over-year drop in the index since April 2017. While disappointing, it fits with the expected soft gross domestic product reading expected in the fourth quarter and reports of a soft fall freight season.

ATA Truck tonnage this month

z truck.png

Compared with November 2018, the SA index fell 2.1%, the first year-over-year decline since April 2017 and the largest drop since February of that year. The index is up 3.3% year-to-date compared with the same period last year.

source: ATA


The following was reported by CASS:

  • North American freight volumes fell 3.3% compared to last November, making this the 12th consecutive drop.
  • Truckload linehaul rates are down 3.5%
  • Intermodal shipping costs have increased by 2.88%

z truck2.png

Both the shipments and expenditures components of the Cass Freight Index remain down from their peaks in May and September of 2018, respectively, but both appear to be getting "less bad" with y/y comps not off as much as we saw in October. Over the coming months, expect y/y growth to flatten out, as the industrial economy is expected to bottom, while the consumer remains relatively healthy.

Shipment volumes, which have been negative y/y all year, fell 3.3% y/y in November. We've been talking for several quarters now about how we're in another freight recession (the other being 2015-2016) during this long-tenured economic expansion in the U.S., which shows most clearly in the rail carload, LTL tonnage, and Cass shipment data. Some of this is due to an inventory destock (primarily at the retail level), while much is due to the softening industrial economy (where we believe inventories are still elevated). Moving into 2020, we expect volumes to flatten out but not surge much, and a turn to positive y/y comps in the shipments index could be seen as soon as January 2020

z truck1.PNG


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