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Truck Volume Growth Slowing In 2016

Truck Volume Growth Slowing In 2016

The U.S. truck tonnage demand for high inventories has seen a downfall nationwide since January 1st. Although the tonnage remained flat as last year’s year-over-year comparison, the volume of the month-over-month declined by 1.4%.

Chief Economist Bob Costello at American Trucking Association said, “Clearly, 2016 started soft for truck tonnage”. Last year’s ending quarter set a benchmark with the highest all-time seasonally adjusted For-Hire Truck Tonnage Index despite the slowing down of freight volume in the second quarter of 2015.

Unfortunately, Costello believes that the deceleration will be lingering in the first quarter of 2016. He also believes that an important yet ill-fated role has been played by this year’s weather where the winter seemed to last longer than expected, slowing down the delivery and shipment processes.

“The winter storms that hit in January likely suppressed volumes some, but by falling 1.4 percent, I doubt tonnage would have been positive without the storms. So, that tells me that the inventory situation continues to weigh on truck freight volumes”, Costello states.

This drop in the trucking demands is one of the root causes of the rise in inventories, leaving the retailers with no other option than to retool their promotion calendar and other labor-related issues and port congestion.

Even after ten months of those talks coming to an end, the ratio of inventory-to-sales still kept declining and at variance. There was no stability, as reported by the Census Bureau. There were months when the inventory to sales ratio reached high and the retailers spoke of the one and a half months of inventory on hands they were worried might remain in warehouses and then there were days when the retail sales seasonally adjusted and rose at a 3.4% rate higher than anticipated in January 2016. Furthermore, the continuing efforts by the retailers alike will help to chunk down inventories into manageable sizes.

In his concluding remarks, Costello stated that, “The sooner the supply chain cleans out the excess stocks, the better for trucking.” – See more at: http://truckernews.com/truck-volume-growth-slowing-in-p724-90.htm#sthash.qnDHLMQY.dpuf

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