Summary
Truck tonnage, which fell close to 20 percent by some carriers' calculations, seems to have hit bottom sometime in the first or second quarter. A leading truck tonnage index shows that tonnage rose in May for the first time since February, although it wasn't large enough to offset the cumulative declines in March through April. Still, for a sector that has been in the doldrums since August of 2006, this is welcome news.
Analysis
You have to stop digging before you can get out of a hole. On that rather bleak scale, trucking appears to have hit bottom.
The May Truck Tonnage Index compiled by the American Trucking Associations shows that May for-hire truck tonnage rose 3.2 percent for its first monthly rise since last February. While that jump was not enough to offset the declines from March through April, which resulted in a cumulative reduction of 6.7 percent, it still is welcome use.
Compared with year-ago May figures, tonnage has contracted 11 percent. That is its best year-over-year results in three months. Despite the improvement from April's 13.2 percent plunge, the May decrease still is historically very large.
"I am hopeful the worst is behind us," said ATA Chief Economist Bob Costello. "But I just don't see anything on the economic horizon that suggests freight transportation tonnage is ready to explode."
Anecdotal evidence from carriers and shippers point to some tightening capacity on certain geographic lanes. Reefer traffic is holding up very well. Some specialized equipment carriers report increased demand. As money from President Barack Obama's stimulus plan slowly filters down to the states and localities, equipment associated with building roads and bridges can be expected to surge in demand.
Still, there are many headwinds. The consumer is feeling pinched from still-growing job losses, higher fuel prices, falling home values and a tighter market for credit.
Truckers, especially in the truckload sector, already have taken out perhaps as much as 15 percent of overall capacity in the past two years. That tightening of supply would appear to indicate that the overall supply/demand curve is somewhat aligning itself to something associating normal. If that's the case, rates might begin to tick up in the last two quarters, although only on a customer-by-customer basis. No account is guaranteed right now.
