Truck tonnage saw nice volume rebounds in May on the heels of multiple months of declines, according to data issued this week by the American Trucking Associations (ATA).
Seasonally-adjusted (SA) for-hire truck tonnage at 144.1 (2000=100) was up 6.5% compared to April, which was down 1.5% (revised from a previously stated decline of 2.5%) in April and 1.1% in March and 0.1% in February.
On an annual basis, the SA was up 4.8%, following a 1.8% decrease in April and a 0.6% annual gain in March. This annual increase marks the largest one for the SA going back to last November. Through the first five months of 2017, the SA is up 0.9% annually, with the SA up 2.5% annually in 2016.
The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment and the metric ATA says fleets should benchmark their levels with, hit 145.3 in May, which was 8.5% ahead of April. Compared to May 2016, the NSA is up 4.5%.
As defined by the ATA, the NSA index is assembled by adding up all the monthly tonnage data reported by the survey respondents (ATA member carriers) for the latest two months. Then a monthly percent change is calculated and then applied to the index number for the first month.
After three straight [SA] declines totaling 2.6%, truck tonnage snapped back in May,” said ATA Chief Economist Bob Costello in a statement. “One month does not make a trend, but the nice gain last month fits more with the anecdotal reports I’ve been hearing from fleets, at least more so than three straight months of decreases. Despite the robust jump in May, I still expect moderate growth going forward as key sectors of the economy continue to improve slowly.”
Some of these key sectors, which have been previously outlined by Costello, include things like lower inventory levels, better manufacturing activity, solid housing starts, good consumer spending, as well as an increase in the oil rig count – all of which are drivers of freight volumes.
Should the inventory issues truly continue to recede, it will go a long way in helping volume growth, especially if it runs in tandem with ongoing job growth, and the semblance of sustained gains in retail sales and consumer confidence, too.
Costello noted in a video accompanying the organization’s data that the strong tonnage performance in May matches up more with anecdotal reports ATA has been hearing than the previous three months of declines, with the index appearing to “make up some ground” after being somewhat softer than expected.
“But one month does not make a trend, there is no doubt about that,” he said. “I do expect more moderate growth going forward, as we are in an economy that is growing more moderately. And we are going to see a nice GDP increase in the second quarter compared to the first quarter, which only grew 1.2%. The second quarter should be closer to 3%, and we can expect moderate growth in tonnage going forward, not necessarily a large gain like we saw in the month of May.”
Costello’s sentiment matches up well with what attendees at last week’s eyefortransport 3PL Summit in Chicago were telling LM. While tonnage is decent, many 3PLs with a trucking and domestic transportation management focus explained that capacity remains available and are hopeful that busy peak season and the coming implementation of the ELD mandate later this year will translate into sustained tonnage gains.