Year-over-year index down 10.8 percent

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The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index climbed 3.0 percent in January 2009, marking only the second month-to-month increase in the last seven months. Still, the gain did little to erase the revised 7.8 percent contraction in December 2008.

In January, the seasonally adjusted tonnage index equaled just 104.7, its second-lowest level since October 2002. In January, the nonseasonally adjusted index fell 4.4 percent from the previous month to 97.2. ATA recently revised the seasonally adjusted index back five years as part of its annual revision. Compared with January 2008, the index declined 10.8 percent, which was slightly better than December’s 12.5 percent year-over-year drop.

ATA Chief Economist Bob Costello said that there was no reason to get excited about January’s 3.0 percent month-to-month improvement. “Tonnage will not fall every month, and just because it rises every now and then doesn’t mean the economy is on the mend,” Costello said. “Furthermore, tonnage is contracting significantly on a year-over-year basis, which is highlighting the current weakness in the freight environment.” Costello also noted that any sustained recovery in tonnage is still months away.

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Freight outlook seen deteriorating
FTR Associates (www.ftrassociates.net) says that its mid-month North American Commercial Truck and Trailer Outlook flash report for February showed a further weakening in freight and equipment demand. With economic activity on pace to worsen in the first quarter from the deep declines already registered in the fourth quarter of 2008, FTR says the industry is experiencing sharp drops in freight volume equal to the very low levels of the 1982 recession.

FTR expects year-over-year tonnage freight drops to bottom at -10.3 percent in the second quarter before beginning a slow rise to a still stressful -6.6 percent in the fourth quarter. For truckers, this promises steadily increasing pressure on rates into the summer months, FTR says; when coupled with tightened availability of credit, these freight numbers translate into very low truck production numbers. The already-low January order levels could be the highest of the year, FTR says.

“The continued economic deterioration puts us on course for a minus-10 percent freight year – the worst market in a generation,” says Eric Starks, president of Nashville, Ind.-based FTR.