When tuning in to trucking news, it's not uncommon to see news outlets report out on tonnage. A quick way to process these reports would be more or increased tonnage is good, as it means more material is being moved and therefore, that the industry is performing well, while decreased or less tonnage is bad for the opposite reason.
There's more to it than that though—the trucking industry is so large that it takes more than tonnage to decide if a month is good or not. Moreover, there are a plethora of factors that can affect tonnage.
Who Measures Tonnage Anyway?
Tonnage is reported out in the Monthly Truck Tonnage Report (MTTR), as put out by the American Trucking Associations (ATA). In this report, tonnage is a relative measurement of the total amount transported by motor carriers and has been collected since 1973.
In collecting the data, ATA ensures the confidentiality of the companies they're collecting data from—the names of the companies and how often they're collected from are kept private, as is what freight they carry, and what proportion of the data collected they comprise.
The data the ATA collects represents only a very small piece of what the overall picture of the industry looks like.
Trucking Trends
After tanking sharply and experiencing a volatile rollercoaster of peaks and valleys throughout 2020, no doubt due to the global health crisis, the ATA has released their report and concluded that tonnage for the end of 2020 is up 7.4%, putting the industry back to where it was at the beginning of 2020 before the effects of COVID, with no signs of stopping its upward trajectory.
The index used to measure tonnage also increased from November, from 111.7 to 120, which can generally be interpreted as a rise in the economy, as it indicates that production and consumption are booming.
For further comparison, November's rate of increase was only about 3.2%, only about half of what it would be in December.
What Affects Tonnage?
In October, when trucking tonnage fell, it was taken as a sign of how COVID was affecting holiday plans and traditions like seasonal shopping. More generally, this little dip would be interpreted as a sign that the economy was slowing down.
Following months when tonnage is improved, factors like how much construction is being started on privately owned homes, retail sales, and improved manufacturing can all contribute to improved truck tonnage. Supplies and products needing to make their way onto shelves to be eagerly consumed and supplies to make such products needing to make their way to manufacturing plants foster growth in our trucking industry.
The different demands for different types of freight can also affect tonnage. For example, in March, when fear of COVID was really revving up, levels of freight concerning household goods soared, whereas gasoline and restaurant freight stagnated.
The 'weights' different freight types hold in the economy will also affect tonnage. In September, trucking tonnage recovered after the poor performance in August, with retail and home construction freight helping to balance out the slump in industrial freight.
The seemingly simple number we see in tonnage reports has a whole myriad of factors behind it that can affect the climate of the logistics industry. Hopefully, this article helped shed some light on what some of those factors might be.
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