The trucking industry plays a vital role in the U.S. economy, transporting goods and products across the country. The American Trucking Association (ATA) releases monthly reports on truck tonnage, the measure of the weight of goods transported by trucks. According to the latest report, truck tonnage increased by 1.5% in January 2022 compared to the same period last year.
“Tonnage has increased nicely in the last couple of months,” ATA Chief Economist Bob Costello said in a Feb. 21 news release. “I suspect that some of the gain is attributable to capacity coming out of the network, especially those carriers that primarily operate in the spot market and/or bought expensive used equipment in the last couple of years.”
“This would push more freight to contract carriers, which dominate this index,” Costello continued. “It could also be that freight bottomed and is coming up a little, too. So, the gain is likely a little higher demand and a little less supply.”
The index, which uses 2015 as a benchmark of 100, saw a modest increase in January 2023 at 117.1 compared to December 2022’s 116.2 reading and January 2022’s 115.3 record figure – demonstrating slow but steady growth in the months since.
The January year-over-year gain marked the index’s 17th consecutive annual increase. Despite the modest gains in December 2022 and January 2023, tonnage is off 1.4% from a high in September 2022.
At this month’s Recruitment & Retention Conference, Costello predicted that although a mild recession might be on the horizon for 2023 in America, he is optimistic about how resiliently and strongly the freight industry will stand against it.
ATA calculates its monthly tonnage index based on surveys from its membership, and has been doing so since the 1970s.
The Logistics Managers Index which also closely follows the trucking, freight, warehouse, and transportation industries, declined in January 2023 when measured against 2022’s strong number during the pandemic, but increased from December 2022.
January’s LMI of 57.6, while higher than December’s 54.6, was down from the 2022 figure of 71.9. This marks the number’s second consecutive overall increase. The authors of the index noted that back-to-back rates of growth are notable as they come after a run of seven or eight months of declining growth.
The economists charged with compiling the LMI believe the economy is still strong.
“The big U.S. economic news in January was the 517,000 jobs that were added. This came a surprise to some given the high-profile rounds of layoffs occurring at places like Microsoft and FedEx,” Dale Rogers, professor of business at Arizona State University, said in the report. “The losses in tech were more than made up for by gains in other areas — including the transportation and warehousing sectors, which added 23,000 workers in January.”
“The Fed hinted that by slowing down the pace of rate increases they will give the economy time to catch up to the corrections they have already attempted to install,” Rogers said, “thereby avoiding the dreaded overcorrection. Much of the decrease in inflation is due to falling prices in products like food, energy and housing, all of which are particularly impactful to consumers.”
Each month the Council of Supply Chain Management Professionals works in conjunction with researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada-Reno to craft the LMI report to signify if things are looking up or on their way down in the industry. Any read of the LIM calculated above 50 indicates the logistics sector is expanding while anything below 50 indicates a contraction.
Despite some economists’ fears of a possible recession, DAT Analytics based in Beaverton, Oregon reports that its DAT Truckload Volume Index hit new high in January, confirming that trucking is still continuing to grow.
According to DAT, van freight’s Truckload Volume Index (TVI) is 2.8% higher than what it was in December 2022; it is also up 2.8% on the year-over-year scale. Meanwhile, the refrigerated TVI was 3% higher than in December 2022 with an even larger jump of 3.6 % year-over-year. Flatbeds saw double digit gains at increase of 10.7% from December 2022, outpacing all other categories by far and climbing 12.4% year-over-year.
“Volatility gave way to seasonality last month,” DAT Chief of Analytics Ken Adamo said. “After a gangbusters January last year, truckload rates followed a more typical pattern and volumes were remarkably steady this year.”
DAT said their TVI, which illustrates the number of freight loads moved each month, normalized so new data sources can be incorporated without distortion. The index had its baseline set at 100 for January 2015 and since then has been used to gauge changes in truck shipping activity over time.
U.S. Bank’s latest Freight Payment Index reported the steepest year-over-year plunge in truck shipments since 2020, with freight volume during peak shipping season dropping significantly in the fourth quarter of 2022.
The index showed that Q4 truck freight shipments contracted 7.1% year-over-year. That’s the largest drop since Q3 2020 and is down 4.6% compared with the third quarter of 2022.
The slowdown was driven by a significant contraction in the West, where volumes dropped 8.9% year-over-year and 10.6% compared with the third quarter of 2022.
Source: ttnews
