US truck tonnage levels better than expected in January

  • US truck tonnage levels better than expected in January

    US truck tonnage levels better than expected in January

    US for-hire truck tonnage is slipping from month to month, but remains higher than expected in a freight recession, according to the latest data from the American Trucking Associations (ATA).

    The non-seasonally adjusted ATA For-Hire Truck Tonnage Index dropped 0.4 percent in January from December, but at 112.7 was still higher than the 109.2 reading for January 2021.

    Seasonal adjustment turned the slight drop in tonnage to a 0.7 percent gain, a sign the ATA expected a deeper fall-off in freight in January than the actual 0.4 percent decline.

    “I suspect that some of the [seasonally adjusted] gain is attributable to capacity coming out of the network, especially those carriers that primarily operate in the spot market and/or bought expensive used equipment in the last couple of years,” Bob Costello, ATA’s chief economist, said in a statement Wednesday. “This would push more freight to contract carriers, which dominate this index.”

    Such a shift in freight could account for the better-than-expected volume seen in the ATA index. In addition, some contract carriers are already operating under new contractual routing guides with lower rates for 2023, which may mean more freight is flowing their way.

    However, economic indicators give little reason to think freight volumes are actually rising. The industrial and retail sectors that generate truck freight are limping into 2023.

    “Given January’s hotter-than-expected inflation numbers, it’s difficult to make a strong case for housing activity over the coming months,” Jason Miller, associate professor of logistics at Michigan State University and a Journal of Commerce analyst, said in an email Wednesday.

    Housing activity has declined over the past year, depressing the market for furniture and appliances, and that has kept the inventories of those retailers overstocked, Miller said.

    US manufacturing contracted for the third consecutive month in January, according to S&P Global’s US manufacturing purchasing managers index (PMI). That will cut into future industrial shipments, said S&P Global, the parent company of the Journal of Commerce.

    By William B. Cassidy at JOC

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