Signals of a strong U.S. economy are showing up in freight demand.
Last year, freight volume increased 3.7 percent, the largest annual gain since 2013, when the index was up 6.1 percent.
These freight figures are a positive sign for 2018, especially combined with other factors such as increased U.S. manufacturing and solid retail sales, according to the American Trucking Associations’ For-Hire Truck Tonnage Index.
“The near-term outlook for manufacturing appears bright,” said Bank of the West Chief Economist Scott Anderson. This late-cycle acceleration could be owed to a weak dollar that is making U.S. manufactured goods more attractive globally, and accelerating global growth increasing demand from abroad, Anderson said.
The retail sector is also on fire. “From a year ago, December retail sales increased 5.4 percent,” Anderson said. “Over the past three months retail sales have increased at an accelerated 11.3 percent annualized pace.”
This continued improvement also “reflects a much stronger freight network,” said Bob Costello, the ATA’s chief economist. Several factors are at play, including “consumption, factory output, construction and improved inventory levels throughout the supply chain,” Costello said.
The amount of freight hauled in December dropped 5.7 percent year-over-year. The dip comes after an increase of 7.6 percent in November.
“Despite the decline in December, last year was a solid year for truck tonnage, especially during the second half of 2017,” Costello said.
ATA calculates its tonnage index based on surveys from its membership. In December, the index equaled 141.9, down 3.4 percent below the previous month of 146.9 in November.
Trucking hauls nearly 71 percent of tonnage carried by all modes of domestic freight transportation. The industry accounts for about $676.2 billion in freight business, or 79.8 percent of total revenue earned by all transport modes, according to the ATA.