Tracking Tons & Truckers

How tightly is growth in trucking employment tied to rising freight tonnage? Not as tightly as you might think, based on a review of U.S. payroll and tonnage data.

Employment and tonnage trends are diverging in 2011, a comparison of the sequential monthly percentage changes for both shows. For shippers, that divergence is one more warning of tighter truck capacity and higher rates.

It also suggest that trucking companies, like many other businesses, are reluctant to increase their payrolls in the face of mounting economic uncertainty.

In the chart below, I’ve matched the monthly percentage change in trucking employment over the past year from U.S. Bureau of Labor Statistics data against for-hire truck tonnage figures from the American Trucking Associations.

Through the end of 2010, we see the kind of relationship between tonnage and employment we might expect. Sequential increases in tonnage last September and October were followed by a 0.5 percent increase in employment in November.

Tonnage increases of 2.5 and 3.5 percent in December and January were followed by a 0.8 percent spike in trucking employment in February, when motor carriers added 11,000 jobs in reaction to strengthening freight demand, according to the BLS.

But when tonnage increased 1.9 percent in March and 2.6 percent in June, a jump in employment didn’t follow. In fact, the growth rate of trucking’s payroll has been slowing since February, dropping to 0.1 percent in July, the BLS data show.

The 110,000 for-hire carriers tracked by BLS only added 1,300 jobs in July, according to the Labor Department agency’s seasonally adjusted data.

A year-over-year comparison of the monthly BLS trucking employment data shows hiring increasing from last October through April, when the growth rate reached 3.1 percent. Since April, however, that rate has stayed between 3 and 3.3 percent.

Whatever its cause, trucking’s slow employment growth rate means shippers should not expect capacity, as measured by available personnel, to keep up with demand if for-hire truck tonnage rises again in the fall as the peak-shipping season arrives.

As of July, trucking employment had increased 2.3 percent since January, 3 percent from a year ago and 4 percent from the 10-year nadir it hit in March 2010, the BLS data indicate. Trucking employment was still 7.6 percent lower than July 2008.

Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc

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