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18 • June 15-30, 2019 Business
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b Tonnage from page 17 b
er economy,” said ATA Chief Economist Bob
Costello. “February and March were particularly
weak months, as evidenced by the 3.5%
dip in tonnage due to weather and other factors,
so some of the gain was a catch-up effect.”
Costello also indicated that the Easter
holiday, later than usual in 2019, was likely
to have pushed some freight normally moved
in March into the month of April.
“I do not think the fundamentals underlying
truck tonnage are as strong as April’s
figure would indicate, but this may signal
that any fears of a looming freight recession
may have been overblown,” he continued.
Compared with April 2018, the SA index
increased 7.7%, the largest year-over-year
gain since July.
The not seasonally adjusted index, which
represents the change in tonnage actually
hauled by ATA fleets before any seasonal
adjustment, equaled 117.7 in April, 1%
above the March level of 116.6.
The industry experts are keeping an eye
on freight rates and capacity numbers. New
trucks are still being purchased in near-record
numbers, adding 10,000 or more trucks
to the nation’s capacity each month and far
exceeding the growth in freight. Everyone
knows there must be a tipping point, but
predicting when it will occur is tricky and
carriers want to bring in as much revenue as
possible while they still can.
Tariffs are on the forecaster’s minds, as
well, as current tariffs and those threatened
by the Trump administration continue to roil
the markets.
“While we can hope for a better outcome
than overly-heated rhetoric suggests, should
the tariffs occur, freight markets, which are
already stagnating, will be impacted,” said
ACT Vice President Steve Tam in a May 21
release of its Commercial Vehicle Dealer
Digest. “The moral of the story is that if
goods cost more, fewer goods can be purchased,”
he continued. The monthly report
provides analysis on transportation trends,
equipment markets and the economy.
“It is likely that tonnage will improve
in the second quarter,” Costello said, “although
year-over-year gains will be significantly
below the 2018 annual increase of 6.7
percent.” Tam’s outlook was similar.
“While there is a very low probability,
and no expectation, of an economy-wide recession
this year,” he said, “freight-related
data points have been sufficiently bad, both
in breadth and duration, that a freight recession
is not out of the question, and higher
tariffs could be what tips the scales.”
As for the April ATA Tonnage report,
The April report from the U.S. Census
Bureau, Monthly Advance Report on Manufacturer’s
Shipments, Inventories and Orders,
showed that new orders for durable
goods fell by 2.1% in April from March, a
total drop of $5.4 billion. New orders have
fallen in two of the past three months. Most
of the decline came in the form of orders
for transportation, including orders for new
Class 8 trucks and trailers.
Shipments of durable goods also fell in
three of the past four months, including a
$4 billion decline in April from March numbers.
Freight rates have remained relatively
stagnant, partially due to the season and in
part due to expanding trucking capacity. According
to the latest DAT Trendlines, rates
received a small boost due to the Memorial
Day holiday and the spot market should
begin rising as summer approaches. Spot
van rates rose to $1.85 per mile to start the
month of June, up a nickel from May rates.
Flatbed spot rates also climbed, reaching
the $2.34 per mile they averaged in March
before declining by six cents per mile into
May. Spot refrigerated rates also climbed by
six cents over May numbers, reaching $2.21
to begin the month of June. The report noted
that flatbed demand is expected to soften.
It will be interesting to see how the usual
summer increases in both freight amounts
and rates may be offset by declining imports
resulting from new tariffs and by the everincreasing
number of available trucks on the
road. 8
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