The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 0.5% in October after rising a revised 1.5% in September 2011.
September’s increase was slightly less than the 1.6% gain ATA reported on October 25. The latest gain put the SA index at 116.3 (2000=100) in October, up from the September level of 115.8.
The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 118.5 in October, which was 0.8% below the previous month.
Compared with October 2010, SA tonnage was up 5.7%. In September, the tonnage index was 5.8% above a year earlier. Further, October’s tonnage reading was just 4.4% below the index’s all-time high in January 2005.
“Tonnage readings continue to show that economy is growing and not sliding back into recession,” ATA Chief Economist Bob Costello said. “Over the last two months, tonnage is up nearly 2% and is just shy of the recent high in January of this year.”
Costello added that he expects freight and the economy to increase at a slower pace next year, but that truck tonnage can outpace GDP growth.
“Manufacturing output has been the primary reason why truck freight volumes are increasing more than GDP. The industrial sector should slow next year, but still grow more than GDP, which means truck tonnage can increase faster than GDP too,” he said.
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, with the assumption that 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 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9 billion tons of freight in 2010. Motor carriers collected $563.4 billion, or 81.2% 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.