Truck Tonnage Decelerates in April

The trucking industry is predicting a fairly busy year in 2011. They have forecast numbers that show "moderate growth" for the industry, which has been supported by the numbers that we’ve seen so far.



The For-Hire Truck Tonnage Index increased by 2.7 percent in February, followed by a 1.9 percent increase in March. According to the ATA, the adjusted seasonal index was up 6.3 percent, which was up from the 4.4 percent year-over-year gain in February. The first quarter (seasonally) showed a 6.1 percent increase from a year ago, which is high for the first quarter of the year for the trucking industry. The first quarter marked a 3.8 percent increase over fourth quarter numbers.



The seasonal For-Hire Truck Tonnage Index showed a decrease in April of 0.7 percent, reflecting a deceleration from the previous months. Experts are not too concerned, however. They feel that with fuel prices declining and volatile freight volumes, the forecast shouldn’t change. Lower fuel prices should drive freight volumes up as well as motor carrier bottom lines, according to ATA Chief Economist Bob Costello.



"Don’t be alarmed by the sequential drop in the tonnage index," he said. "The drop in April is not a concern." Economists at the Manufacturers Alliance/MAPI agree, predicting a 2.7 percent GDP growth in 2011.



The decline in April truck tonnage is reflective of a drop in durable goods orders. Additionally, the drop should have been expected when compared with March, because many orders were delayed by excessive winter storms in February, driving the numbers for March higher than would normally be expected.



According to an article on The Journal of Commerce website, "Transportation equipment showed the largest swing (downturn in April), with orders decreasing 9.5 percent, shipments down 3 percnt and inventories up 1 percent in April. Durable goods inventories hit their highest level in April since 1992, increasing $3.2 billion to $350.5 billion in value, the U.S. Census Bureau said in its monthly report."



They also mention that supply chain disruptions after the March earthquake and tsunami in Japan may account for some of the decline in automotive demand that we saw in April, which would affect the truck tonnage index as well.



Overall, we don’t expect the April decrease in truck tonnage to have a big effect on the whole year. Circumstances of the political and financial economy are expected to make things fluctuate. Other transportation industries, like the ocean shipping industry, rail and air freight sectors are also affected by the same circumstances and are watching for trends and changes that affect ocean freight rates and other transportation forecasts.