December Truck Tonnage Grows 4.2%
This story appears in the Jan. 31 print edition of Transport Topics.
Freight tonnage ended 2010 on a high note, as American Trucking Associations reported its seasonally adjusted cargo index climbed 4.2% in December to its highest level since early in the recession.
The December index reading of 111.6 was the highest since September 2008. Truck tonnage now has risen for 13 consecutive months, but growth has been unsteady and will continue that way, ATA鈥檚 chief economist said.
鈥淚 continue to expect truck freight tonnage to grow modestly during the first half of 2011 and accelerate in the later half of the year into 2012,鈥 said economist Bob Costello.
鈥淔leets continue to tell me that freight volumes are very choppy 鈥 up one week but down the next,鈥 Costello said, describing what he called 鈥渁 see-saw pattern. That is a trend that is likely to continue this year as the economy is not growing across the board yet.鈥
Trucking鈥檚 rebound has coincided with the recovery in financial markets measured by the Dow Jones industrial average, which topped 12,000 intraday last week and earlier in January climbed above pre-recession levels.
Freight tonnage has increased nearly 13% from the low point of 99.2 that it touched in April 2009, when the Dow languished below 8,000.
Fleets are being helped by relative strength in the manufacturing and retail sectors, Costello told TT, while housing and construction markets are weaker and provide a drag on volume.
During 2010, truck tonnage rose 5.7%, ATA said in a Jan. 25 announcement. On a month-to-month basis, the index gained 2.2% from a revised reading of 109.2 for November. That upward movement followed a dip of 0.6% in November from the October level.
The moderate upward trend, as well as the uneven growth, was highlighted in several fourth-quarter earnings statements by publicly traded truckload carriers.
Werner Enterprises Inc., Omaha, Neb., said one-way truckload business softened until mid-November before improving in the first week of December and then sinking back to more typical seasonal levels for the rest of the month.
鈥淔reight volumes in the second half of 2010 have been modest and measurably below the demand experienced in the second quarter of 2010,鈥 Kevin Knight, CEO of Knight Transportation, Phoenix, said in a Jan. 26 statement. 鈥淲e expect the modest volume levels to continue into the first quarter of 2011.鈥
CEO Stephen Russell of Celadon Group Inc., Indianapolis, made the same point about late 2010 volume trends during his company鈥檚 conference call.
Jerry Moyes, CEO of Swift Transportation, Phoenix 鈥 in the carrier鈥檚 first conference call since becoming a publicly traded company again 鈥 said that 鈥渄emand maintained the pace of improvement over the prior year and was substantially flat with the third quarter.鈥
Forecasting firm FTR Associates of Nashville, Ind., was optimistic about 2011 in the January edition of its Shippers Update newsletter, saying that 鈥渢ruck freight is showing signs of recovery from its pause in the second half of 2011. Recovery is expected to begin to accelerate early in 2011, with significant volume increases likely in the second quarter.鈥
FTR predicted a resumption of steady 4% growth in 2011 trucking volume.
The firm also said that 鈥渞ecent data is looking more upbeat. Spending picked up last month, and manufacturing is reaccelerating. A decline in initial claims supports the view that employment will make solid gains in 2011.鈥
Adding another positive voice, Credit Suisse analyst Christopher Ceraso also pegged tonnage growth this year at nearly 4%.
Recent trucking indicators, such as TransCore鈥檚 North American Freight Index, Ceridian/UCLA Pulse of Commerce Index and the Cass Freight Index pointed upward.
Meanwhile, other economic forecasters balanced their comments about a favorable economic direction with cautionary language.
The Conference Board, which compiles business information, said its December index of leading economic indicators rose to the highest level ever, though its announcement characterized expected 2011 growth as 鈥渦neven鈥 and facing 鈥渟trong head winds.鈥
Its consumer confidence index also rose in a Jan. 20 report. In the most recent reports, dated Jan. 27, the Commerce Department said durable goods orders excluding aircraft rose 1.4%. unemployment claims rose 51,000 in a Labor Department report on the same day.
Concern about that issue prompted the Federal Reserve to say on Jan. 26 that the economic expansion 鈥渋s continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions.鈥
ATA, in its weekly economic report dated Jan. 21, detected a听 generally upward trend.
鈥淢ost economists now believe that real (i.e., inflation-adjusted) gross domestic product will increase over 3% during the first half of 2011, up from forecasts of 2.5% just a few months ago,鈥 ATA said in its report.
ATA鈥檚 unadjusted index, which counts tonnage actually hauled before accounting for seasonal trends, declined 1% last month to 107.2.
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