ATA reports sluggish January trucking volumes

Seasonally-adjusted (SA) for-hire truck tonnage in January at 132.8 (2000=100) dropped 1.4 percent from December’s 134.7, which is an ATA all-time high along with November 2015, on the heels of a flat November to December reading.

On an annual basis, January was flat and below the 0.8 percent annual gain in December, with total 2015 SA tonnage up 2.6 percent over 2014.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 127.1 in January, trailing December by 5.2 percent and ahead of 2015 by 0.2 percent.

As defined by the ATA, the not seasonally-adjusted 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.

“Clearly, 2016 started soft for truck tonnage,” said ATA Chief Economist Bob Costello in a statement. “There was a deceleration in freight volumes during the second half of 2015 which continued into the first month of 2016. The winter storms that hit in January likely suppressed volumes some, but by falling 1.4 percent, I doubt tonnage would have been positive without the storms. So, that tells me that the inventory situation continues to weigh on truck freight volumes. The sooner the supply chain cleans out the excess stocks, the better for trucking.”

As previously reported, the inventory overhang continues to hinder freight transportation volumes and particularly impacts trucking as it moves roughly 70 percent of all U.S. freight.

When inventory levels running too high as they currently are now, it typically results in transportation volumes seeing declines, which is where things currently stand.

What’s more increased consumer spending levels during the holidays did not materialize to anticipated levels, with December retail sales underwhelming, coupled with consumers having opted to pay down debt rather than shop more even though low gas prices were viewed not all that long ago as something that would spur increased spending, and another thing being a way to empty shelves and warehouses of the excess inventory, which is clearly needed.

Industry analysts have noted that the most recent batch of ATA numbers reflect muted freight demand, which is also apparent in terms of weak spot market demand and soft truckload capacity, too.

Trucking executives are not bullish about 2016, given the inventory situation and flat GDP growth. And the recent slump on the manufacturing side also is contributing to depressed tonnage numbers as well.

“While freight demand probably won’t be robust once inventory levels reach normalized levels, it should feel somewhat better than it has for the past 6-9 months,” wrote Stifel analyst John Larkin in a research note. “We should see some improvement, on the inventory front, in the 2Q as late spring/early summer merchandise is moved into place at stores, distribution centers, and fulfillment centers.”