American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index jumped 7.2 percent in February, following a revised 0.3 percent reduction during January. In February, the index equaled 144, up from 134.3 in January. February’s level is an all-time high.
Compared with February 2015, the SA index was up 8.6 percent, which was up from January’s 1.1 percent year-over-year gain. Year-to-date, compared with the same period in 2015, tonnage was up 4.8 percent.
“While it is nice to see a strong February, I caution everyone not read too much into it,” said ATA Chief Economist Bob Costello. “The strength was mainly due to a weaker than average January, including bad winter storms, thus there was some catch-up going on in February. Normally, fleets report large declines to ATA in February tonnage, in the range of 5.4 percent to 6.7 percent over the last three years. So, the small increase this year yielded a big seasonally adjusted gain. If March is strong, then I’ll get more excited.
“I’m still concerned about the elevated inventories throughout the supply chain. Last week, the Census Bureau reported that relative to sales, inventories rose again in January, which is troubling.” he said. “We need those inventories reduced before trucking can count on more consistent, better freight volumes.”
The increase is the largest monthly move for the index since January 2013 (11.4 percent) and the largest year-over-year increase since December 2013 (10.4 percent).
Editors Insight: A monthly report by Cass Information Systems Inc. showed that per-mile truckload rates were 0.5 percent higher this February compared to the same month last year. But the rates were down month-to-month, reaching their lowest point since last summer. Cass analysts attributed the decline to softening demand and overcapacity in the truckload market.
The goods sector is fast approaching the need to rationalize bloated inventories as it did midway through the recession, the Cass Freight Index report notes. Interest rates and warehousing costs are on the rise, increasing the cost of carrying that inventory. 3-25-16 By Elliot Maras