The American Trucking Associations' advanced seasonally adjusted For-Hire Truck Tonnage Index dropped 0.7% in May after falling 1.1% in April.
The latest drop lowered the seasonally adjusted index to 117.8 (2000=100), down from April's level of 118.7. Compared with May 2011, the SA index was 4.1% higher, the largest year-over-year increase since February 2012. Year-to-date, compared with the same period last year, tonnage was up 3.8%.
The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 124.5 in May, which was 6.5% above the previous month.
"Two straight months of contractions is disappointing," ATA Chief Economist Bob Costello said. "The drops in tonnage are reflective of the broader economy, which has slowed."
"The good news is that the decrease in fuel prices will help support retail sales going forward, which is a big part of truck tonnage," he said.
Costello said he's concerned about businesses sitting on cash instead of hiring more workers or spending it on capital, both of which would give the economy and tonnage a shot in the arm, as they are worried about Europe and the so-called U.S. fiscal cliff at the end of the year.
"Annualized tonnage growth should be in the 3% to 3.9% range this year."
The current trends in tonnage closely resemble a "typical" truck cycle, said industry analyst Peter Nesvold with Jefferies & Co. in an e-mail to investors.
"We compared this current tonnage cycle to our truck composite model, which aggregates truck tonnage data over the past 40 years, and we found that this tonnage cycle has been unremarkable in a historical context," Nesvold said. "Based on how devastating the 'Great Recession' was, we expected to see huge swings in truck tonnage relative to the 'typical' tonnage cycle. What we found, however, is that this tonnage cycle has been in line with historical trends."
Nesvold said recent truck freight indicators are "generally moving sideways, whether we look at tonnage, loads, or rates, and mirror softening data from other parts of our coverage."
ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 10th day of the month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.