The American Trucking Associations' advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 0.1 percent in June, marking the third consecutive month-to-month drop. Tonnage fell 1.3 percent in May and has dropped 3.5 percent since March. The not seasonally adjusted index dropped 3.3 percent from May to 114.1.
On a seasonally adjusted basis, the tonnage index declined to a seven-month low of 110.5 (2000 = 100) in June from 110.6 the previous month. Compared with a year earlier, tonnage was down 3.4 percent in June, which is just a slight improvement from the 3.6 percent year-over-year decrease in May.
ATA Chief Economist Bob Costello said that while the government reported the economy grew at a 3.4 percent annualized rate in the second quarter, that strength did not filter into the transport sector. "Our tonnage index fell 1.8 percent during the second quarter from the first quarter and was 3.2 percent lower than the same quarter in 2006," he said.
Costello attributed this difference to several trends. First, the so-called "goods" economy, which is more pertinent for transportation companies and excludes services and adds in imports of goods, unlike the GDP calculation by the government, grew at a slower 2.6 percent annualized rate in the second quarter compared with the overall growth of 3.4 percent.
Second, the housing sector continues to be a bigger drag on motor carriers than the economy at large. Residential investment fell 9.3 percent during the second quarter, according to Bureau of Economic Analysis. Third, manufacturing production, once adjusted for the weight of the goods instead of the value, continues to contract on a year-over-year basis.
"These three points in particular lead to a very tough second quarter for the trucking industry," said Costello. "Unfortunately, with housing still weakening, the improvement in tonnage during the second half of the year will likely be less than previously thought."
Trucking serves as a barometer of the U.S. economy because it represents nearly 70 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods.