ATA and Cass data continue to point to signs of confusion for the freight economy

Many things pertaining to both the freight economy and general economy remain consistently inconsistent for lack of a better description.

That was spelled out in two very reliable monthly freight-based data sources earlier this week, the American Trucking Associations monthly truck tonnage index and the Cass Freight Index Report.

Let’s begin with the ATA’s September data. For the sake of being direct, the data was not good, especially when compared to a promising August, which led industry stakeholders to potentially thinking perhaps the tides were turning in the form of some consistent positive volumes.

But September’s truck tonnage data squelched that optimism. After seeing a 5 percent sequential August gain for its seasonally-adjusted For-Hire Truck Tonnage Index, September was down 5.8 percent, wiping out the previous gain altogether.  What’s more, it was also down 0.7 percent annually for its first annual decline going back to October 2015, an 11-month stretch.

And the ATA’s not seasonally adjusted index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, dropped 5.1 percent from August to September and was off 1.2 percent annually.

ATA Chief Economist Bob Costello pointed to volatility remaining intact in September, adding that the changes in tonnage that are occurring are typical seasonal trends that are making it difficult to discern real or clear truck tonnage trends.

And he also noted that the freight environment at the moment is softer than normal and will remain the case until the inventory correction is complete, coupled with the fact that this slow growth environment does not lend meaningful support to stronger volumes in the coming months.

As for the Cass data, September shipments both saw declines, down 0.4 from August and 3.1 percent annually, while freight expenditures were mixed, down 3.8 percent annually and up 5.2 percent compared to August, which it attributed to gains in fuel over the last six months and not to pricing power increases for any specific mode.

Like the ATA’s data, Cass was down overall what it called a “glimmer of ‘less bad’ hope in August.”

The report explained that September’s data presents the working thesis that overall shipment volumes and pricing levels remain weak in most modes, with increased levels of volatility at all levels of the supply chain like manufacturing, wholesale, and retail, which continue to endeavor to work off high inventory levels.

Those pesky inventory levels sure are continuing to wreak havoc, it seems, especially with Cass noting that inventory levels have contracted from GDP for five straight quarters or roughly 3 percent of total GDP.

But Cass also observed that it’s not all doom and gloom either, as there are some growth pockets, including those related to e-commerce and lower expansion levels for modes serving the auto and housing/construction sectors, which collectively led to lower shipment numbers.

And with trucking serving as one of the most reliable reads for the domestic economy, Cass, like the ATA, pointed out that the “data coming out of the trucking industry has been both volatile and uninspiring.”

These numbers continue to show that the freight economy remains in a state of flux, confusion, disarray or whatever apt term one prefers to use. In any event, while the challenges and issues remain, one can hope that this is not the new normal. Should the inventory issues see some material improvement, it could serve as a springboard to future sustained growth. Now it just needs to happen sooner than later.