Tonnage up sharply in July
ATA economist sees slight gains in second half
Freight demand continues to show volatility as the increase in July was comparable to the decline the month before. The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 1.5 percent in July, while June’s reduction was revised from 1.4 percent to 1.6 percent. The latest improvement raised the SA index from 108.3 in June to 110 in July. The nonseasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 109.9 in July, down 5 percent from the previous month.
Compared with July 2009, SA tonnage climbed 7.4 percent, which matched June’s increase and was the eighth consecutive year-over-year gain. Year-to-date, tonnage is up 6.7 percent compared with the same period in 2009.
ATA Chief Economist Bob Costello says that July’s data didn’t change his outlook for subdued tonnage growth in the months ahead. “The economy is slowing, and truck freight tonnage has essentially gone sideways since April 2010,” says Costello, who nevertheless believes that tonnage will post moderate gains, on average, for the second half of the year. “After accounting for the reduction in supply over the last few years, even small gains in tonnage will have a larger impact on the industry than in the past.”
ATA calculates the tonnage index based on surveys from its membership. The baseline year is 2000.
GE offers lower-risk lease program
GE Capital’s Transportation Finance unit is offering a new rebate lease program aimed at reducing the risk of leasing equipment in an uncertain economy. At the expiration of a fair market value (FMV) lease, the company will rebate customers about 4 cents per mile for underuse – the difference between the lease threshold for miles and the vehicle’s return miles. In addition, the program offers what GE says is a comparatively low charge of 4 cents per mile for overuse. Most lease programs offer no mileage rebate and charge about 6 to 7 cents per mile for overuse, says Dan Clark, president and general manager of the Transportation Finance vertical at GE Capital Equipment Finance.
“Even in good times, customers were coming to us asking if the company could average the miles on trucks at the end of a lease,” says Kirk Mann, strategic initiatives manager. “With the Rebate Lease program, fleets can accomplish this on a unit-by-unit basis.”
The rebate lease program is designed specifically for new sleeper cabs and straight trucks, but GE Capital also can customize lease programs for reefer trailers based on hours. For more information, go to www.americas.gecapital.com.
* The Institute of Supply Management’s composite PMI stood at 56.3 percent in August, meaning that the manufacturing sector still was growing and at a slightly more robust pace than in July.
* The Freight Transportation Services Index edged up slightly in July, rising 0.4 percent over its June level, according to preliminary numbers released by the U.S. Department of Transportation’s Bureau of Transportation Statistics. The July Freight TSI of 98.2 is 2.5 percent higher than July 2009.
* The for-hire trucking industry added 400 jobs during August, according to preliminary figures released by the U.S. Department of Labor’s Bureau of Labor Statistics. Since the beginning of March, trucking companies have added 12,700 jobs, according to the preliminary numbers.
* The value of new orders for manufactured goods was up $600 million, or 0.1 percent, in July from June to $409.5 billion on a seasonally adjusted basis, the U.S. Census Bureau reported. Excluding transportation equipment, the value of new orders fell 1.5 percent.
* The ratio of inventories to sales throughout the economy remained at about 1.26 for the second straight month in July. In July 2009, the inventories-to-sales ratio was 1.35.n The Internal Revenue Service released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business healthcare tax credit when they file income tax returns next year. For a copy of the draft form, go to www.irs.gov and search Form 8941.