Truck tonnage down in October

According to data from the American Trucking Association (ATA), trucking activity fell in October and overall tonnage moved was down. While the ATA has stated Hurricane Sandy could be part of the cause for this decline, it is difficult to determine what other circumstances could have resulted in this downward trend. The For-Hire Truck Tonnage Index fell 3.8 percent in October, and according to the ATA, it was the first year-over-year decline since November 2009.

The importance of trucking
Trucking is an important component of many supply chains, as it is an efficient and quick way to get goods from ports, airports or warehouses to consumers or store shelves. It is predominantly the method companies use to transport their products, and the ATA reported that 67 percent of tonnage shipped is transported via truck - a number that amounted to 9.2 billion tons of freight in 2011.

This number is enormous, especially during the months leading up to the holiday season as companies practice procurement in order to have a sufficient number of products in stock and effectively serve customers.

Potential reasons for the decline
Even though it could be impossible to determine why trucking tonnage was down in October, some speculation includes the effects of Hurricane Sandy, which closed roads and shipping routes along the East Coast, making logistical operations difficult for many companies.

The decrease could also be due to more companies investing in new shipping methods, such as ocean freight. Recent research from market research firm Lucintel revealed that the demand for marine shipping will increase through the remainder of 2012 and the total volume of ocean freight is expected to double within the next 20 years. Ocean freight is becoming more appealing to companies looking to enjoy greater cost savings and have less of an impact on the environment.

Some believe the slowdown could be due to the struggling economy, as manufacturers have slowed their production and consumers are buying less.

"I'd expect some positive impact on truck tonnage as the rebuilding starts in the areas impacted by Sandy, although that boost may only be modest in November and December," said Bob Costello, the ATA's chief economist. "Excluding the hurricane impacts, I still think truck tonnage is decelerating along with factory output and consumer spending on tangible goods."