ATA Truck Tonnage Index fell 0.9 percent in September

ATA Chief Economist Bob Costello said the recent decreases in truck tonnage are consistent with a recession. Costello forecasts a recession beginning in the 2008 third quarter and through the first quarter of 2009.

The Trucker News Services

10/28/2008

ARLINGTON, Va. — The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 0.9 percent in September, marking the third consecutive month-to-month drop. The index fell 1.6 percent in August and 0.9 percent in July. In September, the seasonally adjusted tonnage index equaled 112.6 (2000 = 100), its lowest level since October 2007. The not seasonally adjusted index increased 1.1 percent to 116.3 in September.

For the third quarter, the seasonally adjusted index contracted 1.2 percent compared with the second quarter, equating to a 4.8 percent annualized rate decrease.

The seasonally adjusted index was just 0.8 percent higher compared with September 2007. While the index rose year-over-year because of weak 2007 volumes, it is quickly falling toward negative territory.

“I anticipate truck freight volumes to continue to fall before they improve,” said Costello. “It is a tough freight market, and there is nothing on the horizon that says this will change anytime soon.”

Note on the impact of trucking company failures on the index: Each month, ATA asks its membership the amount of tonnage each carrier hauled, including all types of freight. The indexes are calculated based on those responses. The sample includes an array of trucking companies, ranging from small fleets to multi-billion dollar carriers. When a company in the sample fails, we include its final month of operation and zero it out for the following month. This assumes the remaining carriers pick up that freight. As a result, it is close to a net wash and does not end up in a false increase. Nevertheless, some carriers are picking up freight from failures, and it may have boosted the index. Due to our correction mentioned above, however, it should be limited.

Trucking serves as a barometer of the U.S. economy, representing nearly 70 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.7 billion tons of freight in 2006. Motor carriers collected $645.6 billion, or 83.8 percent of total revenue earned by all transport modes.

ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 10th day of the month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.

The American Trucking Associations is the largest national trade association for the trucking industry. Through a federation of other trucking groups, industry-related conferences, and its 50 affiliated state trucking associations, ATA represents more than 37,000 members covering every type of motor carrier in the United States.