The American Trucking Associations' advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 0.3 percent in July, marking the first month-to-month drop since April. The seasonally adjusted tonnage index equaled 116.2 (2000 = 100) in July, while the not seasonally adjusted index fell 0.1 percent to 119.7.
The seasonally adjusted index was 4.4 percent higher compared with July 2007, marking its ninth consecutive year-over-year increase, although the gain was a full percentage point lower than the improvement in June. Year-to-date, the index was up 3.6 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 July's tonnage reading matched several anecdotal reports from motor carriers that freight was softer in July than the previous month. Costello cautioned that truck tonnage could be volatile in coming months because the economy is expected to further soften before improving. However, slight declines in fuel prices and tightening capacity could help offset softer freight volumes.
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. Both ATA tonnage indexes account for motor carriers exiting the industry; therefore, the recent jump in bankruptcies will only have a limited impact on tonnage readings. Specifically, when a company in the sample fails, ATA includes 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 the correction mentioned above, however, it should be limited.