ATA Truck Tonnage Index Up 2.8% in October

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Truck tonnage in October elevated in contrast with year-ago ranges however declined on a month-to-month foundation, an indication that the freight market is reacting to financial and shopper tendencies, American Trucking Associations stated.

The ATA For-Rent Truck Tonnage Index rose 2.8% yearly to 116.3 in October however slid 2.3% from a studying of 119.1 in September, the group stated.

“For-hire truck tonnage noticed the biggest single month-to-month lower in October for the reason that begin of the pandemic,” ATA Chief Economist Bob Costello stated in a Nov. 21 information launch. “The lower matches with the anecdotal reviews of a muted fall freight season. It additionally coincides with a slowing economic system. Housing is a weak spot in freight, along with a slowing in private consumption of products. Whereas manufacturing facility associated freight is holding up higher than different areas, additionally it is decelerating.”

12 months-to-date by October, tonnage was up 3.9% in contrast with the identical interval in 2021, In calculating the index, 100 represents 2015. The index is dominated by contract freight, versus spot market freight, ATA stated.

One other indication of a slowing freight market got here from the month-to-month Logistics Managers Index, which noticed its October quantity fall to 57.5, in contrast with 72.6 in the identical month a 12 months in the past. Regardless of the decline, the LMI nonetheless is in optimistic territory, as any determine above 50 signifies development whereas a quantity beneath 50 signifies a decline. Month-to-month, the index additionally was down from September’s 61.4 studying.

Regardless of the slowdowns, U.S. customers are anticipated to extend spending 6% to eight% throughout the peak vacation purchasing season, in accordance with the Nationwide Retail Federation’s annual vacation purchasing outlook, launched earlier this month.

The present forecast is down from the document 14% improve consumers tallied final 12 months.

Whereas this 12 months’s spending forecast signifies a comparatively robust economic system, economists observe that the expansion vary is successfully equal to the speed of inflation, which is operating at greater than 7% yearly.

“The logistics business continues to wrestle to seek out its method by considerably complicated financial circumstances,” stated Dale Rogers, a professor at Arizona State College and one of many LMI authors. “On-line gross sales are anticipated to extend by 2.5% year-over-year in This fall — a far cry from the explosive development of the final two holidays — dampening expectations considerably by the remainder of the 12 months and making it unclear whether or not or not companies will be capable to wind down the inventories sitting of their warehouses, and if demand for transportation will decide up or proceed its slide.”

Rogers famous the availability chain stays clogged with stock that’s slowly making its methods to retailers, and that the freight rail community continues to have issue transferring a lot of that cargo.

“The rail backups at Chicago switching yards are so unhealthy that [rail carrier] BNSF has begun putting wooden over some tracks so idle containers will be saved on high of them,” he stated. “Union Pacific continues its apply of capping the variety of shipments it’ll settle for as logistics companies kind by the pile of idle and empty bins, to release the chassis and the house wanted to maneuver items away from the ports and in the direction of customers.”

Rogers added, “The glut of stock is a number one issue behind the slowdown in transportation throughout provide chains.”

Researchers at Arizona State, Colorado State College, Rochester Institute of Know-how, Rutgers College and the College of Nevada-Reno, along side the Council of Provide Chain Administration Professionals, subject the LMI report. The index is a mixture of eight distinctive parts that make up the logistics business, together with stock ranges and prices, warehousing capability, utilization, costs and transportation capability.

In the meantime, the October Cass Freight Index elevated by 2.9% year-over-year in contrast with 2021. “We might nonetheless describe the freight market as gentle, with a lot of the current energy on a year-over-year foundation extra statistical noise than a sign, as evidenced by the 5% year-over-year decline in shipments that may happen in December if regular seasonality performs out from right here,” stated the report’s creator, Tim Denoyer with ACT Analysis. “The provision-demand steadiness in U.S. trucking markets has loosened considerably this 12 months, and because of this freight charges are leveling off and set to melt additional within the months to come back.”

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