Written by Steven Hansen
Headline data for the American Trucking Association (ATA) and the CASS Freight Index continue to provide opposing statistics – the question remains is trucking up or down?
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). Even so, CASS breaks out trucking and claims it is down 6.3 % year-over-year and down 3.6 % month-over-month.
I put a heavier weight on the CASS index which is consistent with rail and ocean freight. It is not logical that truck freight goes up when industrial production and ocean freight decline – not to mention the continuing affects of the trade war and the coronavirus.
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). Additionally, Econintersect believes that the BLS is not capturing all truck employment.
ATA Trucking
ATA recently revised the seasonally adjusted index back five years as part of its annual revision.
Said ATA Chief Economist Bob Costello:
Over the last two months, the tonnage index has increased 0.6%, which is obviously good news. However, after our annual revision, it is clear that tonnage peaked in July 2019 and, even with the recent gains, is down 1.8% since then. Softness in manufacturing and elevated inventories continue to weigh on the truck freight tonnage.
ATA Truck tonnage last month before the annual revision
ATA Truck tonnage this month
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Compared with January 2019, the SA index rose 0.8%, which was preceded by a 3.1% year-over-year gain in December. In 2019, the index was 3.3% above 2018.
source: ATA
CASS FREIGHT INDEX REPORT
The following was reported by CASS:
- North American freight volumes fell 9.4% year over year in January, marking the largest decline since 2009
- With excess capacity, truckload linehaul rates remain down year over year (-6.3%)
- Intermodal shipping costs fell -2.5% after small increases in November & December.
- Coronavirus creates uncertainty around containment and eventual impact on global supply chains.
z truck2.png
The turn of the calendar didn’t leave the bad news in 2019, as the Cass Freight Index showed continued weakness in the U.S. freight market. Both the shipments and expenditures components of the Cass Freight Index worsened sequentially and showed decelerating y/y growth. According to the broader stock market levels, there is still optimism out there, but the freight trends have yet to turn. And the Covid-19 coronavirus case count continues to grow, creating uncertainty around containment and eventual impact on global supply chains. Some Chinese factories resumed operation this past week, but they are still not close to 100% production levels. Others have pushed re-opening back to March 1.
As stated last month, we expect 2Q20 to have the best chance of showing actual y/y growth in domestic U.S. shipments and freight costs, if traditional seasonal freight patterns hold, because 2Q19 was below average in terms of the seasonal surge in activity. Plus, depending on how the aforementioned coronavirus affects supply chains, there could be a 2Q20 wave of import activity (and therefore truck and intermodal) when the Chinese export machine starts churning again.
Shipment volumes dropped 9.4% in January vs 2019 levels (Chart 1), as the index posted its lowest absolute reading in roughly three years. It was also the steepest y/y decline since 2009. This follows a sluggish end to 2019, where many blamed last month’s weakness on timing of the holidays. There could have been a residual impact post-New Years, but with the negative y/y and sequential decline, and the deceleration in the y/y growth rate, we don’t see much good news in this volume number.
“…a little bit softer now.”
| January 2020 | Year-over-year change | 2-year stacked change | Month-to-month change | |
| Cass Freight Index – Shipments | 1.022 | -9.4% | -9.6% | -2.9% |
| Cass Freight Index – Expenditures | 2.568 | -8.0% | -0.8% | -5.7% |
| Truckload Linehaul Index | 130.62 | -6.3% | -1.1% | -3.6% |
| Intermodal Price Index | 141.49 | -2.5% | 1.6% | -4.5% |
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Source: http://www.cassinfo.com/Transportation-Expense-Management/Supply-Chain-Analysis/Cass-Freight-Index.aspx
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