Up in June, Down in July: Welcome to the Trucking Recovery of 2008

ATA Chief Economist Bob Costello said July’s tonnage reading matched several anecdotal reports from motor carriers that freight was softer in July than the previous month. Costello cautioned that truck tonnage could be volatile in coming months because the economy is expected to further soften before improving. However, slight declines in fuel prices and tightening capacity could help offset softer freight volumes.

  These "hiccups" in the trucking economy have lasted longer than anyone expected. The truth is no one really knows where this economy is heading. Sluggish growth, at best, is expected for the rest of this year.  With a new administration and Congress coming to Washington next year, there is a chance for another big stimulus package, which could help jump-start the economy.

  U.S. Gross Domestic Product grew at an anemic 1.9 percent rate in the second quarter, an improvement over the 0.9 percent increase in the first quarter. But that was below a predicted 2.3 percent GDP growth predicted by a poll of economists by Bloomberg News at the start of the year.

  Anecdotal reports from various trucking industry sources show that growth is somewhat improved over the past two years. But July volumes were soft, indicating perhaps another "false start" to this recovery process.
  For example, Arkansas Best CEO Robert Davidson, who runs the nation's sixth-largest LTL carrier, noted that tonnage rose a scant 0.9 percent in the second quarter. That continues a trend started in the fourth quarter last year of continuous tonnage growth, albeit modestly.

  Mostly, truckers are benefiting from the reduction in truck capacity. FTR Research, which tracks the number of trucks in operation, reports that 470,000 trucks were idled in the second quarter. That compared with 380,000 idled in the same quarter a year ago.