What Is the Truck Tonnage Index?
The truck tonnage index is an index that measures the gross tonnage of freight which is transported by motor carriers in the United States for a given month. The index serves as an indicator of shipping activity, and consumption of goods in the U.S. Analysts also use the truck tonnage index to determine the state of the U.S. economy as over 70-percent of all freight tonnage is via truck.
Understanding the Truck Tonnage Index
The index is weighted proportionately to reflect the current composition of the trucking industry. Calculation of the index uses a seasonal adjustment, and there is a one-month lag between the time of data compilation and reporting. A rise in the index is generally seen as a rise in the economy, because it indicates that production is up, as well as of consumption of consumer goods.
The truck tonnage index was first introduced by the American Trucking Association (ATA) in 1973. ATA, formed in 1933, is an advocacy group for the trucking industry. The association aims to educate both the public and policymakers about the importance of the trucking industry’s role in the economy. In reaching the goal of the ATA, the index has proven to be a valuable tool. Both raw materials and consumer goods for retail sales are shipped domestically via truck.
Truck Tonnage Still Rolling Strong
The Federal Reserve Bank of St. Louis maintains a chart of the truck tonnage index on their website. In 2016, 10.55 billion tons of freight were shipped within the U.S. by truck. This total amount represents $738.9 billion in gross freight revenues from trucking alone.
Beyond the revenue generated by trucking, the industry also contributes to the economy through payment of federal and state highway-user taxes. In 2015, these taxes added up to $41.3 billion. The ATA estimates that there are over 3.5 million truck drivers in the U.S. contributing to these numbers.
In March 2018, the truck tonnage index read at 110, which was a 1.1 percent decrease from its reading of 111.2 in February of the same year. A month before, the index had dropped in January as well. However, the ATA’s Chief Economist, Bob Costello does not anticipate further declines. This belief is partly because the index, though in slight decline, still ranked higher than it did during the same months in 2017. Costello told TruckingInfo.com, “While I expect the pace of growth to continue moderating in the months ahead…the levels of freight will remain good going forward,”