Trucking Index Up – But Qualifies the Growth

I always read the American Trucking Associations’ tonnage reports.  Movement of freight in America is the pulse point of the economy.  The headlines of their September 2010 report:

The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 1.7 percent in September after falling a revised 2.8 percent in August. The latest gain put the SA p–index at 108.7 (2000=100) in September from 106.9 in August.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 112.4 in September, down 0.9 percent from the previous month. 

Compared with September 2009, SA tonnage climbed 5.1 percent, which was well above August’s 2.9 percent year-over-year gain. Year-to-date, tonnage is up 6.1 percent compared with the same period in 2009. 

ATA Chief Economist Bob Costello said that truck tonnage over the last few months fits with an economy that is growing very slowly. “While I am glad to report that tonnage grew in September, the fact remains that truck freight volumes leveled off over the summer and early autumn. This is a reflection of an economy that is barely growing.”  Costello noted again this month that the trucking industry is significantly smaller than it was prior to the recession, but as a result, is better equipped to deal with slower than normal tonnage growth.


 Econintersect believes the seasonal adjustment factors are suspect due to the New Normal, and the Great Recession data which put an artificially low data period into the seasonal adjustment methodology.  There is some question that the New Normal September shipping should be lower than August based on manufacturing shipments data we have seen to date.  As you should note from the graph above, there is an overall downward trend in shipping beginning in the 2Q2010.

But the real news of this release is the qualifier issued by the ATA after the headlines:

Note on the impact of trucking company failures on the index: Each month, ATA asks its membership the amount of tonnage each carrier hauled, including all types of freight.  The indexes are calculated based on those responses.  The sample includes an array of trucking companies, ranging from small fleets to multi-billion dollar carriers. When a company in the sample fails, we include its final month of operation and zero it out for the following month, with the assumption that the remaining carriers pick up that freight.  As a result, it is close to a net wash and does not end up in a false increase.  Nevertheless, some carriers are picking up freight from failures, and it may have boosted the index. Due to our correction mentioned above, however, it should be limited.

The ATA is stepping back from their data and analyzing its conclusions.  So often, Econintersect has criticized other data releases because the agency releasing the data has not analyzed how their methodology is fairing under the conditions of the day.  No methodology is perfect, and certain conditions may yield a questionable answer.

Econintersect thanks the ATA for analyzing and qualifying its own conclusions.