Two key monthly freight transportation report issued yesterday, the American Trucking Associations (ATA) For-Hire Truck Tonnage Index, and the Cass Freight Index Report, each provided positive news for November.
For the former, the ATA reported that its advanced seasonally-adjusted (SA) index at 115.8 (2000=100) was up 2.3% in November, following a 3.9% October gain (revised up from 3.3%), and was up 7.6% compared to November 2016, which was below October’s 10.5% annual increase, while still turning in a strong performance. On a year-to-date basis through November, the SA is up 3.5% annually.
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, came in at 147.1, which was 3.1% below October’s 151.8. And on an annual basis, the NSA was up 7.6% annually.
“The freight market is really strong,” said ATA Chief Economist Bob Costello in a statement. “The solid truck tonnage figures over the last four months suggest to me that this holiday spending season might be better than many expected, and the best in several years. The strength in tonnage also shows that other parts of the economy are doing well, too, including business investment, factory output, and even construction.”
Earlier this year, Costello said it was reasonable to expect moderate growth moving 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.
For the latter, the Cass Freight Index Report, showed both sequential and annual gains for November freight shipments and expenditures.
Many freight transportation and logistics executives and analysts consider the Cass Freight Index to be the most accurate barometer of freight volumes and market conditions, with many analysts noting that the Cass Freight Index sometimes leads the ATA tonnage index at turning points, which lends to the value of the Cass Freight Index.
November shipments, at 1.155, were up 0.2% over October and 6.3% annually and have been positive for the last 14 months. Freight expenditures in November, at 2.629, saw 0.9% gain over October and a 14.3% annual hike.
“Throughout the U.S. economy, we are continuing to see a growing number of data points suggesting that the economy continues to get increasingly better,” wrote the report’s author Broughton Capital Founder and Managing Partner Donald Broughton. “In fact, it now looks as if the October 2016 Cass Shipments Index, which broke a string of 20 months in negative territory, was one of the first indications that a recovery in freight had begun.”
Addressing the gains in freight expenditures, Broughton commented that the report’s freight expenditures index has posted what he called “one ever-larger percentage increase after another throughout 2017,” adding it is indicative of an economy continuing to expand.
On the shipments side, he stated that parcel volumes associated with e-commerce continue to show outstanding rates of growth, with both FedEx and UPS both reporting strong U.S. domestic volumes.