The latest data from the American Trucking Associations (ATA) reveals that freight tonnage remained largely stable in June following a downward trend in May, reflecting the complex challenges and opportunities facing the US transportation sector.
Tonnage Index Shows Minor Decline but Remains Above 2020 Levels
ATA's seasonally adjusted (SA) For-Hire Truck Tonnage Index for June stood at 111.6 (2015=100), marking a 1.5% decrease from May, slightly worse than the previous month's 1% decline. However, the June SA index showed a 0.5% year-over-year increase, reversing May's 3.3% annual decrease. For the first half of 2023, the SA index has accumulated a modest 0.3% growth.
The not seasonally adjusted (NSA) index, which better reflects actual tonnage moved by fleets, reached 116.2 in June, up 2.4% from May's 113.4. ATA notes that its tonnage index primarily measures contract freight rather than spot market shipments.
Supply Chain Issues Meet Capacity Constraints
ATA Chief Economist Bob Costello stated: "Tonnage has generally been flat over the last six to nine months. The good news is it remains slightly above 2020 levels. Supply chain issues may be creating some downward pressure on tonnage. But the lack of projected growth could also relate to industry-specific capacity constraints."
Costello explained that the index primarily reflects contract freight volumes while private trucking fleets have seen their tractor counts decrease due to ongoing driver shortages. "With reduced equipment, it becomes difficult to haul more tonnage, which explains why we're seeing such strong demand in the spot market as shippers scramble to move goods," he added.
Capacity Crisis Persists While Driver Recruitment Shows Promise
Jeff Tucker, president of Tucker Worldwide - one of America's oldest freight brokerage firms - echoed these observations, citing Morgan Stanley data showing current capacity conditions have reached or exceeded 2018's worst capacity crisis levels.
"We've been operating above what was historically the worst capacity crisis for several weeks and months now," Tucker noted. However, he highlighted some positive developments in driver recruitment, with June seeing the first long-term increase in driver applications - up 13% - providing relief for large fleets.
Key Factors Influencing Freight Tonnage
Several critical elements shape current freight tonnage trends:
- Economic Activity: Directly correlates with freight demand, currently facing inflationary pressures and rising interest rates
- Supply Chain Disruptions: Ongoing port congestion, labor shortages, and material scarcities continue affecting production and shipping efficiency
- Driver Shortages: Chronic lack of qualified drivers constrains transportation capacity
- Fuel Prices: Significant operational cost factor that may lead shippers to reduce shipments when prices rise
- Seasonal Variations: Predictable demand fluctuations tied to holidays and weather conditions
Industry Outlook: Balancing Challenges and Opportunities
The trucking sector faces several critical challenges moving forward:
- Potential economic downturn reducing freight demand
- Persistent global supply chain disruptions
- Worsening driver shortages
- Potential regulatory changes increasing operational costs
However, significant opportunities exist:
- Sustained e-commerce growth driving freight demand
- Federal infrastructure investments creating new shipping needs
- Technological innovations like autonomous trucks and smart logistics improving efficiency
Conclusion
ATA's June tonnage data indicates the US trucking industry at a pivotal juncture. While confronting substantial challenges, the sector retains significant growth potential. Trucking companies must embrace innovation, enhance operational efficiency, and strengthen shipper relationships to navigate current conditions successfully. Simultaneously, policymakers should implement measures supporting industry health and national economic stability.
Industry Context
- The US trucking industry generates over $700 billion annually and employs more than 8 million workers
- Trucks transport over 70% of US freight
- Primary shipped commodities include consumer goods, industrial products, agricultural items, and energy materials