ARLINGTON, Va. – For-hire truck tonnage continued to contract south of the border in May, but the American Trucking Associations’ chief economist believes trucking will still recover from Covid-19 more quickly than other industries.
“While tonnage fell in May, even though other economic indicators like retail sales and housing starts rose, I’m not overly concerned,” said Bob Costello, noting the ATA’s seasonally adjusted For-Hire Truck Tonnage Index was down 1% after contracting 10.3% in April. The April figure was revised upward after the initial report of a 12.2% decline.
“First, while down over 10% sequentially in April, truck tonnage did not fall as much as other economic indicators that month. This means that any rebound is tougher since tonnage didn’t fall substantially to begin with. Second, there are indications that freight continues to improve as more and more states and localities lift lockdown restrictions,” he said.
The May figure still represents the largest year-over-year decline since 2009, during the Great Recession, but the index is not falling as much as during that economic downturn.
“While the overall economy will likely take more than a year to recover, assuming the pandemic doesn’t spike again, the trucking industry could recover back to pre-Covid levels before many other industries because it hasn’t fallen as much,” Costello said. “As retail sales improve and housing starts recover, that will help trucking. The risk for trucking is that the virus surges again and places start to shut back down again.”
Compared with May 2019, the seasonally adjusted index contracted 9.6%. In April 2009, the index was off 14% from a year earlier. The latest drop was preceded by a 9.4% year-over-year drop in April. Year-to-date, compared with the same period in 2019, tonnage is down 2.6%.
Removing the seasonal adjustments, and looking at the tonnage alone, May’s index was 2.8% above the April level.
The For-Hire Truck Tonnage Index is dominated by contract freight rather than spot market freight.
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