ATA Reports “Choppy” Year for Tonnage in 2019

“Last year was not a terrible year for for-hire truck tonnage, and despite the increase at the end of the year, 2019 was very uneven for the industry,” said ATA Chief Economist Bob Costello. “The overall annual gain masks the very choppy freight environment throughout the year, which made the market feel worse for many fleets. In December, strong housing starts helped advance the index forward.”

The Cass Freight Index indicated a 7.9 percent year-over-year drop in overall shipment volumes during December.

“Our view is that the second quarter of 2020 has the best chance of seeing actual year-over-year growth in shipments and freight costs, if traditional seasonal freight patterns hold,” said Cass Information Systems in the December Cass Freight Index Report.

The freight market is weak due to higher inventories and contraction in the manufacturing economy, said Cass. The latest ISM manufacturing index and decelerating rail volume both point to slowing in the manufacturing sector.

“And while we expect comps to ease and volumes to flatten out, we are not forecasting much growth in terms of freight volumes in 2020. The U.S. industrial economy – rebound or no rebound – will likely be the biggest swing factor,” said Cass. “And the tariff relief from the Phase 1 deal seems to be just that – a relief for some, but not a stimulus.”

Spot rates appeared to be stabilizing in early January after hitting bottom in mid-2019. However, rates during the week of January 13-19 dropped for vans and reefers, indicating the start of a slump that DAT Trendlines expects to end around mid-March.

Flatbed rates, normally down at this time of year, are in a surprising rebound. DAT attributes higher demand from the oil industry as oil rig counts increase in the U.S. and Canada. The national average flatbed rate is up 7 cents from November to $2.19 per mile.

The trucking industry serves as a barometer of the U.S. economy, said ATA. The industry moves more than 70 percent of the tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods.