Truck Tonnage Slips for Second Consecutive Month in June
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The trucking industry experienced its second consecutive month of tonnage erosion in June, .
The ATA For-Hire Truck Tonnage Index slipped 0.4% sequentially to 113.3 from 113.8 in May. The index also decreased 0.1% from the same time last year. This marked the second month-to-month decrease this year, with the first being in May. The not seasonally adjusted index declined 1.1% sequentially to 114.9. Tonnage is now up 0.1% year to date.
“After a strong start to the second quarter, with tonnage levels increasing sequentially and from a year earlier in April, freight levels eased in May and June,” said ATA Chief Economist Bob Costello. “In the second quarter, truck tonnage was essentially flat, increasing 0.2% from the first quarter, but falling 0.2% from a year earlier. Freight levels have been helped recently by small gains in factory output and retail sales, but weaker construction activity, especially for single-family homes, has been a drag on volumes.”
ATA calculates its monthly tonnage index by surveying its membership. The feedback primarily comes from contract freight rather than spot market freight. In calculating the index, 100 represents the year 2015.
(American Trucking Associations)
The Port of Los Angeles reported its busiest June on record at 892,340 containers. But this was mainly because of shippers looking to front-load cargo to beat new tariffs, in what port officials have called a “whipsaw effect.” That has even included some importers bringing in year-end holiday cargo now to avoid potential higher tariffs later in the year.
“Every time there is a deadline for tariffs, people try to bring in the stuff early, and then there is a subsequent hangover or downdraft after that because you’ve already got the stuff in,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “So this seesawing is going to go on until we really settle down on a tariff rate, and we know that this is it for the next six months to a year.”
Dhawan added that the general economy is still in stasis despite that uneven freight tonnage. He has seen larger corporations focus on trying to get clarity on tariffs to figure out when to import and how much, while smaller companies grapple with interest rates. There is still work getting done, he noted, but also little growth or reductions when it comes to their operations.
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“So companies are not in a mood to hire,” Dhawan said. “They’re also not laying off people like they were doing last year in early 2024. Because the demand is there, the consumer is still buying, it’s just they don’t want to take the risk of expanding, because they don’t know what the landscape is in the coming six months. Will the Federal Reserve really cut the rates aggressively, as I have been forecasting? But the White House has been asking, and there’s murmurs of, ‘Will they stay on the sidelines?’ That affects the cost of borrowing for the smaller companies.”
Dhawan also warns that this economic stasis cannot last forever, it’s just not clear how long that will be. The lack of growth can lead to companies taking a hit to their bottom line, he pointed out, which they won’t be able to do forever. But they’re also not likely to reinvest into their operations until they are able to get some clarity on where the market is heading.
“There is never a certainty,” Dhawan said. “But you always want to minimize the unknowns, especially on pricing side, before you do the expansion plans. Now the second part is the consumer — does the consumer have enough firepower to satisfy the current plans of the companies? And that is where I’m seeing some dark clouds. For example, Social Security payments.”
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The Logistics Managers’ Index registered at 60.7 for June, compared with 59.4 in May. This marked the third time the index has gone above 60 since July 2022. Each of these times occurred this year. The report noted that the increase was driven by a growing rate of expansion for inventory levels. This expansion mostly occurred in the first half of June.
“The uncertainty exists due to both the high levels of inventory already in the U.S., as well as the continued ambiguity regarding future U.S. trade policy,” the LMI report noted July 1. “Many of the temporary suspensions on tariffs are due to end in the next month. Whether or not deals can be reached will dictate the direction of financial markets, the overall economy, and the logistics industry.”
The Cass Freight Index found that June shipments decreased 2.4% year over year to 1.052 from 1.078. They also declined 0.2% sequentially from 1.054. The report noted that the trade war is having a variety of effects as a result of inventory building in anticipation of increased tariffs, and subsequent drawing down. But the report did find that volumes remained steady from May.
