Release Date: 01 October 2008
Release ID: 1396
The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 1.6 percent in August, marking the largest month-to-month drop since March of this year. Additionally, the index fell 0.9 percent in July, a downward revision from the 0.3-percent drop reported Aug. 26. In August, the seasonally adjusted tonnage index equaled 113.6 (2000 = 100), its lowest level since November 2007. The not seasonally adjusted index decreased 3.4 percent to 115.0 in August.
The seasonally adjusted index was 2.6 percent higher compared with August 2007, marking its tenth consecutive year-over-year increase. The gain was more than one percentage point lower than the improvement in July. Year-to-date, the index was up 3.4 percent compared with the same period in 2007. Tonnage contracted 1.7 percent and 1.5 percent in 2006 and 2007, respectively.
ATA Chief Economist Bob Costello said freight slowed during July and August preceding an expected slowdown in economic activity. “We are forecasting a mild recession later this year and early next year,” he noted. “Make no mistake about it, freight volumes are weakening.” Costello cautioned that year-over-year growth in the index is simply the result of soft tonnage volumes in 2007.
Because trucking is a leading economic indicator, Costello said trucking eventually will see an improvement before the overall economy.
Note on the impact of trucking company failures on the index: Each month, ATA asks its membership the amount of tonnage each carrier hauled, including all types of freight. The indexes are calculated based on those responses. The sample includes an array of trucking companies, ranging from small fleets to multi-billion dollar carriers. When a company in the sample fails, we include its final month of operation and zero it out for the following month. This assumes the remaining carriers pick up that freight. As a result, it is close to a net wash and does not end up in a false increase. Nevertheless, some carriers are picking up freight from failures, and it may have boosted the index. Due to our correction mentioned above, however, it should be limited.
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