U.S. freight numbers up in November

November data from two prominent transportation trackers continue to show a national economy that is improving but not with impressive gains.

The American Trucking Associations’ Truck Tonnage Index was up 2.7% in November after a 1.9% dip in October. The October decline was revised from an initial estimate of 2.8%. Year-to-date, the index is up 5.8% compared to the same period in 2012.

The not-seasonally adjusted index, which represents the real change in tonnage hauled by the fleets, equaled 122.4 in November, which was 8.8% below the previous month.

“Tonnage snapped back in November, which fits with several other economic indicators,” ATA Chief Economist Bob Costello said in his report. “Assuming that December isn’t weak, tonnage growth this year will be more than twice the gain in 2012.” 

Tonnage, as measured by the ATA, increased 2.3% in 2012.

Costello said strong tonnage gains in the second half of the year suggest the economy is better than some may believe.

“Still, truck tonnage continues to be supported by fast growing sectors of the economy that generate heavy freight loads, like residential construction, fracking for oil and natural gas, and auto production,” Costello said.

Trucking serves as a barometer of the U.S. economy, representing 68.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. Trucks hauled 9.4 billion tons of freight in 2012. Motor carriers collected $642.1 billion, or 80.7% of total revenue earned by all transport modes.

North American shipments in November measured by the Cass Freight Index were down 1% compared to October, but were 1.1% above November 2012 and 4.6% higher than November 2011.

“Stronger–than-expected manufacturing activity and shipments of seasonal goods offset a general slowing of freight movements to temper the drop in shipment levels,” noted Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., who provides economic analysis for the Cass Freight Index. “Expenditures rose just slightly, largely because of a surge in spot market rates the last week of the month.”

The Cass report also provided the following points about shipments in November.
• The weekly railroad traffic reports from the Association of American Railroads showed carload shipments up 2.7%, but inconsistently – up two weeks and down two weeks.

• Intermodal shipments slowed over the month, posting a 1% year‐over‐year gain in November after rising 2.5% in October.

• Refrigerated loads surged in the final week of the month due to the Thanksgiving holiday

• Given the current high levels of inventory, it is not surprising that the number of shipments is not growing – even in spite of the anticipated 3.9% rise in holiday sales over last year.

Cass uses data from $22 billion in annual freight transactions processed by its information processing division to create the Index. The data comes from a Cass client base of 350 large shippers.

Cass uses data from $22 billion in annual freight transactions processed by its information processing division to create the Index. The data comes from a Cass client base of 350 large shippers.

Wilson is not as optimistic as Costello about economic conditions.

Wilson noted in her report: “We’re seeing mixed economic signals as we approach the end of the year. Many indicators have improved during the last several months, including new home sales, new jobs, new export orders, and manufacturing production, new orders and backlog. Exports rose in recent months, but largely based on the strength of oil product exports. Container exports and imports, largely aimed at the consumer market, have trended downward. Despite the better than expected third quarter GDP, the fourth quarter will not be as strong. December is likely to provide a weak finish to a relatively weak 2013 for the freight industry.”