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Over the past seven or eight months, reflection in the US trucking industry has been on whether it had arrived on the threshold of recovery from the slump into which it plunged two years ago.
And the latest statistics from the American Trucking Associations (ATA) suggest the long wait may finally be over.
At a reading of 115.2, ATA’s monthly For Hire Truck Tonnage Index shows a 3% jump from January, on a seasonally adjusted basis. According to the organisation, this marks “the largest sequential increase seen in several years”.
It follows a gain of 0.1% in January over December.
The version of the index that does not adjust for seasonal factors came in at 104.8, down from 110.0 in January.
“After a scant 0.1% decline in January, which wasn’t bad considering the harsh winter weather and California wildfires, truck tonnage had a robust gain in February,” saud ATA chief economist Bob Costello. “This outcome fits well with our growing optimism for the truck freight market after a two-year recession.”
He added that some of the gain was the result of front-loading imports to avoid tariffs, but the improvement nevertheless indicated “that the freight recovery has indeed begun”.
The Cass Freight Index, widely considered the most accurate barometer of the US freight market as it draws on $44bn in paid freight expenses from hundreds of large shippers, shows a more mixed picture. The index is weighted to the truckload sector.
Its shipment component shows a 10.5% increase from January to February (with half of this due to seasonal factors), and a drop of 5.5% from February 2024. This follows sequential and annual declines of 5.3% and 8.2% in January. On a seasonally adjusted basis, shipments were up 4.9% from January.
“Some of the sequential variation was likely caused by severe January weather, and some of the improvement in February was likely from pre-tariff shipping,” suggested ACT Research’s VP and senior analyst, Tim Denoyer, who authored the report.
The Cass index shows freight spend was up 3.6% month on month in January, but down 4.6% year on year. Expenditures fell 19% in 2023 and 11% last year.
Both the ATA and CASS indices warn that tariffs could impact the trajectory of the trucking market and other key economic indicators could further darken the picture.
In an otherwise upbeat assessment of the freight market, investment bank Citi noted that weakening consumer spending and sluggish industrial output could delay the anticipated recovery in freight pricing.
Meanwhile, Mr Denoyer sees some cause for optimism in the economic environment. He said: “We highlight a silver lining for the for-hire freight market, amid rising recession risk. Elevated uncertainty may be turning the tide of private fleet capacity additions after a long for-hire downturn.”
The rise of private fleets in recent years has been a source of concern for trucking firms, and recent moves by Amazon have added to the worries.
“Private fleet capacity additions continue to result in soft for-hire market conditions, exemplified by more news of Amazon building an LTL network in recent months,” Mr Denoyer wrote.
There has been a broad consensus that more small trucking outfits and owner-operators will fall by the wayside before the recovery lifts all boats. Tariffs might inadvertently accelerate this process, Mr Costello thinks.
He noted that commentators had argued that low values of used trucks may have caused banks to refrain from repossessing vehicles from troubled debtors, allowing them to keep operating. And tariffs would raise the price of new trucks significantly, with a knock-on effect on used trucks. Such a development could change the picture and prompt banks to foreclose on debtors and repossess their trucks, he reflected.
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