Commercial truckers are feeling the impact of increased consumer spending in a crucial step toward recovery.
The American Trucking Association’s for-hire truck tonnage index rose 1.8% month over month and 0.7% year over year in August to 115.8, its highest level since February 2023, according to a monthly ATA report released Sept. 24. Last month marked the second YoY jump in 18 months.
The tonnage index, seasonally adjusted to reflect the expected summer slowdown in trucking, is based on surveys primarily from large-fleet members. The index, which measures total hauled weight rather than shipment volumes, is a barometer of shipping activity and consumer consumption.
“Not only does the latest robust gain show freight levels are coming off the bottom, but so does the sequential pattern over the last eight months,” ATA Chief Economist Bob Costello stated in the report.
Last domino?
The commercial truck market has started improving in recent months after a yearslong slump, exemplified by a drop in used heavy-duty inventory and rising order volume. Among the recent signs of recovery, increased tonnage has been an especially bright spot, an ATA spokesperson told Equipment Finance News.
“The increase in tonnage is vital to the industry’s recovery,” the spokesperson said. “However, it is important to remember that recent increases are only the beginning of a slow crawl out of the freight recession of last year. In the last eight months, lows are becoming less and less severe, which is an important pattern to consider as we are in a transition period of the freight market.”
As mortgage rates fall, increased homebuilding and homebuying are poised to take consumer spending up another notch, which could provide a substantial boost to commercial trucking, Chris Grivas, president and chief executive of Chadds Ford, Pa.-based CAG Truck Capital, told EFN.
“When the [mortgage] rates were 7%, and now all of a sudden they’re at 6.1% or 6.2%, you might be able to afford that house you’ve wanted,” he said. “So, people will need freight to move all of that lumber, roofing material, concrete, furniture.”
While optimistic about the truck financing sector, Grivas said November’s presidential election casts an air of uncertainty over the consumer market.
