The American Trucking Association is the largest trade association representing the trucking industry in the U.S. The organization is run via affiliate networks in all 50 states and represents every sector including full truckload, less-than-truckload, motor carriers, and more. In 1973, the ATA introduced the Truck Tonnage Index, a monthly estimation of the total weight of freight transported by truck in the United States. This article shares details on the Truck Tonnage Index, how the data reflects the overall economy, and other ways to interpret the data.
The ATA creates the tonnage index through a series of surveys of its members. The anonymity of the survey and companies participating prevents us from understanding the percentage of tonnage each company accounts for or the type of freight being shipped. Yet the ATA Trucking Tonnage Index has proven to be a valuable tool in evaluating the state of the U.S. economy.
Importance of Tonnage
The ATA states that 72.5% of all tonnage is transported via trucking which means understanding the Truck Tonnage Index provides insight into the largest segment of the transportation industry. More goods being purchased lead to more shipments to fill the orders which increase overall tonnage. The index is updated every month but experiences a one-month lag between data compilation and reporting. So, oftentimes the index from the previous month will be adjusted with the most accurate numbers.
The index uses seasonally adjusted data and non-seasonally adjusted data. The seasonally adjusted data is a more accurate depiction of the trends because it factors out seasonal dips and peaks unrelated to economic activity. Now that we understand seasonal adjustments, data lag, and economic importance we can analyze what the numbers actually mean.
What Do the Numbers Mean?
The tonnage index for July 2021 was 109.8, but what does that number actually mean? The number is a representation of truck tonnage shipped for the month so the higher this number rises, the more freight shipped.
The index has an established base year that is always represented by the number 100. The current base year is 2015, meaning from 2015 to the present day, truck tonnage has increased by 9.8%. After a certain amount of time, the base year will change to better measure growth or loss in upcoming years. When they establish the base year all the previous years are adjusted in relation to the new base and year.
This also means that index numbers from previous years are retroactively changed and will appear much lower now. This process allows analysts to map clear trend lines of tonnage growth or loss over time.
The State of Trucking Tonnage
In April of 2020, we saw the index dip down to its lowest figure since 2017. Since then, it has been a slow recovery back up. The most recent report in July 2021, shows a slight decrease in tonnage of 1.2% from June. This has been a consistent downward trend since April of 2021 where the index was 114.7. The reason for this decline is believed to be caused by multiple factors.
Shortages on various products like semiconductors have caused delays in shipments which has reduced freight size in recent months. Also, the driver shortage has impacted tonnage by having fewer trucks on the road to move freight. When comparing year-over-year data, the July index fell 2.9% which marked the first year-over-year drop since March 2021. Overall tonnage is down 0.2% compared to the same time frame in 2020.
The ATA trucking tonnage index provides valuable insight on total shipments, new trends, and the state of the logistics industry. Stay up to date on more industry information and trends by reading our 3PL Insights Blog. For more insights on current events and the future of the logistics industry be sure to download our white paper “2021: A Year of Strength, Innovation, and Resilience” which highlights key takeaways from the CSCMP State of Logistics report.