The American Trucking Associations' (ATA) For-Hire Truck Tonnage Index has shown signs of recovery, rising by 1.2% in October 2024, reaching a value of 114.6 compared to 113.3 in September. This marks the third consecutive increase since July 2024, indicating a positive shift in trucking activity. Notably, total tonnage is up 3% from a low point in January 2024, suggesting a rebound in freight demand [33f56f3c].
In a related development, ACT Research's For-Hire Trucking Index also reported growth, with its Volume Index rising 7.4 points to 56.9 in October 2024 from 49.5 in September. This improvement in freight demand trends comes despite ongoing disruptions in the market, highlighting a broader recovery in the trucking sector [a08ce09b]. Durable goods spending increased by 8.3% in the third quarter of 2024, further supporting the positive outlook for freight [a08ce09b].
Adding to the positive economic indicators, the ten largest US ports reported a remarkable 13.1% year-over-year increase in inbound volume for November 2024, surpassing October's 9.7% gain and September's 12.2% increase. This marks fourteen consecutive months of inbound volume growth, with a total value of goods in containers for November reaching $185.3 billion, reflecting strong economic activity [734f2709].
Outbound containers also saw a 7.2% increase, despite a decrease in exports, indicating a robust demand for shipping services. Year-to-date, inbound loads are up 15.2%, significantly higher than the 4.7% growth in outbound loads, suggesting a shift in trade dynamics [734f2709]. The West Coast ports outperformed their East/Gulf Coast counterparts, with a 20.2% increase compared to a 6.0% increase, reflecting ongoing coastal shifting due to labor disruption concerns [734f2709].
However, the trucking industry is experiencing mixed signals according to recent data. The Trucking Conditions Index (TCI) fell from -1.39 in August to -2.47 in September, reflecting ongoing challenges despite the increase in tonnage [b48dc38d]. FTR projects positive TCI readings for the next two years, which could indicate a more favorable outlook ahead [b48dc38d].
In June 2024, the index had experienced a decline of 1.6%, which raised concerns about the trucking industry's stability. The recent uptick in October, along with the second quarter average being 0.2% higher than the first quarter, reflects a more optimistic outlook for the trucking sector [e3ca8721]. The not seasonally adjusted index for October was reported at 121.3, an impressive 8.6% increase from September, further supporting the trend of recovery [33f56f3c].
Despite the positive tonnage data, trailer orders have plummeted by 55% year-over-year, marking the lowest levels since 2013, which raises concerns about future capacity [b48dc38d]. Additionally, spot market rates for dry vans and flatbeds have declined as of November 15, indicating pressure on freight pricing [b48dc38d].
The ATA calculates the tonnage index based on surveys from its membership, which has been a key indicator of the health of the trucking industry since the 1970s. Trucks account for 72.6% of the tonnage carried by all modes of domestic freight transportation, having hauled 11.46 billion tons of freight in 2022. Motor carriers generated $940.8 billion in revenue, representing 80.7% of the total revenue earned by all transport modes [e3ca8721] [33f56f3c].
Despite previous challenges such as low rates and high costs, the recent data suggests that the trucking industry is regaining momentum, which could have positive implications for the broader economy as freight demand continues to stabilize. Interestingly, 40% of carriers expect higher volume in the next three to six months, while 15% anticipate exiting the trucking industry altogether [b48dc38d]. Additionally, the Supply-Demand Balance in the ACT index increased to 57.2, indicating a tightening market, while private fleet expansion is affecting overall market balance [a08ce09b]. The potential ILA strike on January 15 may also accelerate freight pull-forward, adding another layer of complexity to the current landscape [a08ce09b]. Optimism among small carriers and owner-operators is increasing despite these challenges, suggesting a complex but hopeful landscape for the trucking sector [b48dc38d].