The For-Hire Truck Tonnage Index compiled by the American Trucking Associations (ATA) trade group soared a whopping 7.1% in August, which followed a more meager gain of 0.5% during July, which ATA has revised upwards from a previously reported increase of 0.1% .
Compared with August of last year, the index is up 8.2% and year-to-date, compared with the same eight months in 2016, the index is up 2.1%.
“Tonnage was stronger than most other economic indicators in August and more than I would have expected,” noted Bob Costello, ATA’s chief economist, in a statement. “However, prep work for the hurricanes and better port volumes likely gave tonnage an added boost during the month.”
Costello stressed that he expects “short-term service disruptions” to result from the damage caused by hurricanes Harvey and Irma that, when combined with the normal “ebb and flow” of freight, could weaken September’s tonnage numbers.
Other industry analysts, however, believe freight demand spurred by hurricane recovery efforts in combination with soon-to-be-implemented electronic logging device (ELD) mandate could give truckers a very strong hand in terms of negotiating rates in the near term.
“We are beginning to finally see some upward movement in contract rates after a very long wait,” noted John Larkin, managing director and head of transportation capital markets research for Stifel Capital Markets, in a presentation earlier this month.
“The spot market began firming about 14 months ago. Normally, contract rates follow about six months thereafter, but that did not happen this time around,” he added.
“With the two hurricanes, Harvey and Irma, there’s going to be a lot of emergency shipments and a lot of rebuilding-related shipments that could really accelerate the rate at which contract pricing begins to improve—especially heading into the implementation of the ELD mandate, which is scheduled to go into effect on December 18 of this year.”