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November tonnage index logs highest rate of growth since May

1/7/2022

The tonnage index rose in November, the fourth month in a row that it's done so.

The tonnage that truckers haul to their intended destinations typically rises as the holiday season edges ever closer. And as expected, it did so again in the opening month of the all-important period for brick and mortar as well as e-commerce retailers, maintaining a growth streak that began in the summertime.

In November, the American Trucking Associations' advanced seasonally adjusted For-Hire Truck Tonnage Index reached 114.5. That's a one-and-a-half point rise from October and the fourth month in a row that the index has swelled from the preceding month. In October, the month-over-month uptick was 0.4%.

Bob Costello, chief economist for the ATA, noted that while the data is an encouraging sign, there's plenty of room for improvement, particularly in comparison to where the trucking index was around this time in 2020.

"The recent streak is very good, but it should be noted that from April through July, the index fell a total of 4.6%, so we are not quite back to where we were last spring," Costello said.

Costello hastened to mention that on a year-over-year basis, the tonnage index was up 2.5%, the largest growth rate since May. Part of what made this possible was the surge in housing starts. Indeed, builders broke ground on a seasonally adjusted annual rate of around 1.7 million single-family and multifamily residential homes in November, the National Association of Home Builders reported from government data. That's an 11.8% surge from 12 months earlier. Truckers helped to make these projects possible by delivering the materials developers need to build, from lumber to concrete to molding and more.

Retail sales rose in November
But another contributor to the tonnage index was due to the flurry in buying activity, as per usual when November rolls around. As expected, sales ticked higher in November, reaching nearly $640 billion, according to analysis from the United States Census Bureau. This marked the fourth straight month in which retail sales rose on a month-over-month basis and was more than 18% higher compared to November 2020.

Due to the ongoing shortage in truckers, drivers are generally carrying more weight on each trip than they would if they had more people to spread the tonnage around more evenly. In 2020, trucks hauled roughly 10.23 billion tons of freight, according to the ATA. While that total was lower than the 11.84 billion figure from the previous year, the pandemic and resulting economic shutdown affected the flow of interstate commerce. 

Yet despite the slowdown, the trucking industry was responsible for nearly 71% of the surface trade value transported between the U.S. and Canada in 2020 and close to 84% from the U.S. to Mexico.

The final tonnage index report is set to be released in January. This report will detail how many tons of freight truckers hauled in 2021 as a whole and for the month of December in particular. Economists expect it to be up on both a monthly and yearly basis.

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