National Trucking Index Jumps In December Ahead Of Trucker Earnings

A hit-and-miss national trucking sector ended 2011 on a high note with a 6.8% increase in a closely watched index that tracks the sector’s health.

The American Trucking Associations’ advanced seasonally adjusted (SA) Tonnage Index was up 6.8% in December after rising 0.3% in November 2011. The latest gain put the SA index at 124.5 (2000=100) in December, up from the November level of 116.6.

For all of 2011, tonnage rose 5.9% over the previous year — the largest annual increase since 1998. Tonnage for the last month of the year was 10.5% higher than December 2010, the largest year-over-year gain since July 1998. November tonnage was up 6.1% over the same month last year.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 116.4 in December, 0.8% above the previous month.

“While I’m not surprised that tonnage increased in December, I am surprised at the magnitude of the gain,” ATA Chief Economist Bob Costello said in the ATA statement.

Costello said it was the largest month-to-month increase since January 2005.

“Not only did truck tonnage increase due to solid manufacturing output in December, but also from some likely inventory restocking. Inventories, especially at the retail level, are exceedingly lean, and I suspect that tonnage was higher than expected as the supply chain did some restocking during the month.” he said.

During 2011, the index was down in only five months.

January: up 3.5%
February: down 2.9%
March: up 1.9%
April: down 0.6%
May: down 2%
June: up 2.6%
July: down 0.8%
August: down 0.2%
September: up 1.5%
October: up 0.4%
November: up 0.3%
December: up 6.8%

The financial health of area trucking operations soon will be more clear. Lowell-based J.B. Hunt Transport Services and Van Buren-based USA Truck Inc. are expected to report fourth quarter and full-year 2011 earnings on Thursday (Jan. 26). Fort Smith-based Arkansas Best Corp., the parent company of less-than-truckload carrier ABF Freight System, is scheduled to report earnings on Friday (Jan. 27).

J.B. Hunt posted net income for the first nine months of 2011 totaling $184.441 million, up 30.1% compared to the 2010 period. Total revenue for the first nine months of the year is $3.321 billion, up 19.77% compared to the 2010 period.

USA Truck has not been as financially fortunate. The company’s third-quarter earnings report showed a loss of $4.305 million in the quarter, and a loss of $6.423 million for the first nine months of 2011. In 2010, the company reported a loss of $3.308 million, and a $7.177 million loss in 2009.

ABF is struggling to emerge from the red side of the ledger. For the first nine months of 2011, the company reported net income of $4.929 million, a big swing from the loss of $29.305 million in the same period of 2010. Revenue for the first nine months of 2011 is $1.444 billion, above the $1.216 billion in the 2010 period.

According to the ATA, trucking serves as a barometer of the U.S. economy, representing nearly 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9 billion tons of freight in 2010. Motor carriers collected $563.4 billion, or 81.2% of total revenue earned by all transport modes.

Michael Tilley with our content partner, The City Wire, is the author of this report. He can be reached by email at [email protected].