Truck Tonnage Plunged 13.6 Percent in June

Truck tonnage in the United States fell at its sharpest year-over-year rate yet in the economic downturn, plunging 13.6 percent, and the American Trucking Associations issued a pessimistic outlook for the business even in a recovery.

ATA Chief Economist Bob Costello said inventories for retailers and manufacturers remain high, suggesting "this is likely to be the first time in memory that truck tonnage doesn't lead the macro economy out of a recession." 

The assessment came as the ATA's advance seasonally adjusted For-Hire Truck Tonnage Index slipped back last month after showing some gains in May. The index fell 2.4 percent from May to June.

In May, tonnage jumped 3.2 percent. June’s decrease, which lowered the index to 99.8, wasn’t large enough to completely offset the robust gain in the previous month.

But compared with June 2008, tonnage fell 13.6 percent, a much harder fall than May’s 11 percent year-over-year drop. June’s contraction was the largest year-over-year decrease of the current cycle, exceeding the 13.2 percent drop in April.

Costello saw some slim hope for improvement even if it is likely to be choppy at best.

“While I am hopeful that the worst is behind us, I just don’t see anything on the economic horizon that suggests freight tonnage is about to rise significantly or consistently,” said Costello. “The consumer is still facing too many headwinds, including employment losses, tight credit, and falling home values, to name a few, that will make it very difficult for household spending to jump in the near term.”

Inventories relative to sales remain at high levels in much of the supply chain, he said, especially in the manufacturing and wholesale industries. “Today, many new product orders can be fulfilled with current inventories, not new production, thus suppressing truck tonnage.”

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