[Stay on top of transportation news: Get TTNews in your inbox.]
Truck tonnage in April increased on an annual basis but declined compared with March, American Trucking Associations reported.
The seasonally adjusted ATA For-Hire Truck Tonnage Index rose 1.8% to 115.8 compared with April 2021, but dipped 2% from its 118.2 result from March. The index equaled 100 in 2015.
The sequential decline was the first in several months, ATA Chief Economist Bob Costello noted.
After eight straight gains totaling 6.9%, for-hire tonnage finally slid back in April.
— American Trucking (@TRUCKINGdotORG) May 24, 2022
“After eight straight gains totaling 6.9%, for-hire tonnage finally slid back in April,” he said in a May 24 statement. “Despite being the largest sequential drop since August 2020, the index was still above where it started in 2022 and a year earlier.”
Costello added, “It is important to note that ATA’s for-hire tonnage data is dominated by contract freight with minimal amounts of spot market loads. The spot market has softened more than for-hire contract freight as the market transitions back to pre-pandemic shares of contract versus spot market.
“While I expect contract freight to outperform spot market freight, the rate of growth will be slower than in 2021. Most contract carriers are still struggling with maintaining enough capacity, both equipment and drivers.”
Trucking serves as a barometer of the U.S. economy, representing 72.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to ATA. Trucks hauled 10.23 billion tons of freight in 2020. Motor carriers collected $732.3 billion, or 80.4% of total revenue earned by all transport modes, the federation said.
The April Logistics Managers Index showed a month-over-month decline, coming in at 69.7 versus 74.5 a year ago. Compared with March, the index declined from its all-time high of 76.2. While the 6.5 drop is significant, the LMI still is comfortably above its all-time average of 65.3. In the LMI, any figure above 50 indicates economic expansion and below 50 indicates contraction. The LMI is researched and released every month by business professors at Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University and the University of Nevada-Reno, and in conjunction with the Council of Supply Chain Management Professionals.
ASU business professor Dale Rogers said the decline in the LMI is to be expected because the economy is showing signs of strain.
“The economy is clearly in a complex place. GDP in the U.S. was down 1.4% year-over-year and 0.4% when adjusted for inflation. Interestingly, consumer spending grew through Q1, up 0.7%. April was also tough on the market; the Nasdaq dipped 4.2% on the final Friday of April, capping off the worst month for the composite index since the recession of 2008,” Rogers said. “Since the start of 2022, the Nasdaq is down 21%, the S&P 500 is down 13%, and the Dow is off by 9%. At the same time, wages continue to grow, up about 6% from a year ago, and unemployment remains low at 3.6%. Goldman Sachs reports that the U.S. currently has 5.3 million more available jobs than it does workers — the highest this gap has been since the end of World War II.”
Host Michael Freeze turns to Thomas Healy of Hyliion and Tom Lincoln of Dana to discuss how electric truck manufacturers are handling the future of equipment maintenance. Tune in above or by going to RoadSigns.TTNews.com.
The monthly DAT Freight & Analytics report released May 25 also showed that truck freight volumes and spot market rates fell sharply in April, and DAT said that compounds the pressure on small trucking companies and independent operators who already are feeling the pressure of record high fuel prices.
DAT said its April Truckload Volume Index for dry van freight declined by 10% to 273 when measured against March. The refrigerated TVI also fell 10%, to 190, and the flatbed TVI fell 6% to 229.
But while industry officials note that truckload volumes typically decline from March to April, as freight movement has a seasonal lull, year-over-year the April TVI was 12% higher for van freight, 10.5% higher for reefers and 15.1% higher for flatbed loads, indicating strong overall demand for truckload services. The national average price to move van freight under contract remained at $3.26 per mile in April, extending the previous monthly high. The average contract reefer rate was $3.43 a mile, unchanged from March, while the flatbed rate rose 9 cents to $3.79 a mile.
Meanwhile as inflation continues to cause concern about the overall health of the economy, the National Retail Federation has written to President Joe Biden urging a repeal of the Trump administration’s tariffs against a wide range of products imported from China. In a May 18 letter, NRF President Matthew Shay said eliminating the tariffs would reduce the annual rate of inflation significantly.
“Providing relief from the harmful Section 301 tariffs on goods from China would reduce the CPI by 1.3 percentage points, immediately helping alleviate inflation,” Shay said. “These tariffs, many of them in effect since 2018, have not achieved their desired goal of pressuring China to change its trade policies.”
NRF says the tariffs have cost the average American family as much as $1,200 since they were imposed.