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In this post we are putting the spotlight on the American Trucker Association’s For-Hire Tonnage Index for February:
January is typically a slack month in the trucking industry’s calendar; the frenetic pace of the Holiday Season suddenly gives way to a slump which takes us into Spring before business picks up again. 2011 is different, however, as January freight figures demonstrated an increase in business for truckers.
So the announcement that American Truckers Association (ATA) For-Hire Tonnage Index slipped 2.9% in February has some people wondering if there is a problem feeding through into the economy as the reality of high fuel costs starts to sink in.
The good news is that the overall indicators remain positive. The year-on-year numbers look great with an overall increase of 7.6%, and February 2011 demonstrates an increase in business of 4.2% compared to February 2011. We are still not quite recovered to pre-2011 levels yet, however the economic indicators seem to be saying we shall be getting there this year.
December and January haulage figures reported positive growth with a combined 6.1% increase, which compared favorably with the prior year period and also served to mask the February decline.
Why the February numbers have declined is explained by two factors. First of all, the winter months tend to be slack for the trucking industry anyway. January 2011 bucked that trend as shipping orders continued to roll in after the Holidays; February is also a traditionally slack month so the decline is expected if we are following the seasonal fluctuations already set as an industry trend.
A second factor is the impact of increasing gas prices. Unrest in the Middle East combined with rising pump prices (California already is experiencing $4+ gas pricing at the pump) is going to have an impact on how well the economy moves forward and will have a dampening effect.
Gas prices are what are concerning truckers more than anything else at the moment. Overall demand for trucking and logistical services remains high, but the obvious concern is that as increased fuel costs flow through into the rest of the economy, then the trucking industry will be the first to suffer. There is a delicate balance being trodden here, between fuel inflation which is driven by genuine demand as activity picks up, and price increases caused by the risk to fuel supplies with events in oil producing nations.