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Truck Tonnage Index Fell 1% in May -- Much Better Than April’s Decline

Truck Tonnage Index Fell 1% in May -- Much Better Than April’s Decline

June 26, 2020
There are indications that freight continues to improve as more states and localities lift lockdown restrictions.

Trucking in April was much improved from April.  American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index contracted 1% in May after falling 10.3% in April. In May, the index equaled 106.1 (2015=100) compared with 107.2 in April.

“While tonnage fell in May, even though other economic indicators like retail sales and housing starts rose, I’m not overly concerned,” says Bob Costello, ATA's chief economist. “First, while down over 10% sequentially in April, truck tonnage did not fall as much as other economic indicators that month. This means that any rebound is tougher since tonnage didn’t fall substantially to begin with. Second, there are indications that freight continues to improve as more and more states and localities lift lockdown restrictions.”  

April’s drop was revised up to 10.3% from the 12.2% decline reported in the ATA's May 19 report.

Compared with May 2019, the SA index contracted 9.6%, the largest year-over-year decline since 2009 during the depths of the Great Recession, although the index is not falling quite as much as during that economic downturn.

For example, in April 2009, the index was off 14% from a year earlier. The latest drop was preceded by a 9.4% year-over-year drop in April. Year-to-date, compared with the same period in 2019, tonnage is down 2.6%.

“While the overall economy will likely take more than a year to recover, assuming the pandemic doesn’t spike again, the trucking industry could recover back to pre-COVID levels before many other industries because it hasn’t fallen as much,” Costello says. “As retail sales improve and housing starts recover, that will help trucking. The risk for trucking is that the virus surges again and places start to shut back down again.” 

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 109.8 in May, 2.8% above the April level (106.9). In calculating the index, 100 represents 2015. ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight. 

Trucking serves as a barometer of the U.S. economy, representing 71.4% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.49 billion tons of freight in 2018. Motor carriers collected $796.7 billion, or 80.3% of total revenue earned by all transport modes.

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