Truck Tonnage Plummets in April

Truck tonnage in the United States fell at its sharpest rate in 13 years in April as an apparent inventory correction hit in the midst of the lowest point yet for demand during the recession.

The American Trucking Associations’ For-Hire Truck Tonnage Index plummeted 13.2 percent compared to the same month a year go, sliding to 99.2 percent, the lowest level for the ATA index since November 2001. 

The seasonally-adjusted index also fell 2.2 percent in April compared to March, the second straight month-to-month decline. The index had fallen 4.5 percent in March. 

The drop in the closely watched measure of domestic shipping demand contrasts with other measures of activity that suggest economy is declining at a slower rate. ATA Chief Economist Bob Costello said it appears retailers and manufacturers pared back inventories even further in April as they adjusted to the downturn. 

“While most key economic indictors are decreasing at a slower rate, the year-over-year contractions in truck tonnage accelerated because businesses are right-sizing their inventories, which means fewer truck shipments,” said Costello. “The absolute dollar value of inventories has fallen, but sales have decreased as much or more, which means that inventories are still too high for the current level of sales. Until this correction is complete, freight will be tough for motor carriers.”

Costello also said truck freight has yet to hit bottom and it could be a few more months before this occurs.

Contact Thomas L. Gallagher at tgallagher@joc.com.