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Released: October 31, 2007
September Truck Tonnage Declines 2.3%
American Trucking Associations' seasonally adjusted for-hire truck tonnage index for September has declined 2.3% from a year ago. The downturn followed a 0.9% year-over-year gain in August, and the September index was up 1.5% measured from the previous month, ATA reported. The index's reading was 111.6. Year to date, the truck tonnage index was 2.2% lower than the same time last year. The not seasonally adjusted index fell 10.6% from August, to 107.4. ATA calculates the tonnage each month based on reports by its member trucking companies.
The reading points to continued softness in the trucking industry despite the month-to-month increase, said ATA Chief Economist Bob Costello. Although the 1.5% gain was the biggest monthly increase since February, Costello expects tonnage to remain choppy in the foreseeable future, a trend that began several months ago. "Nearly all economic indicators suggest continued sluggishness for the trucking industry in the near term," Costello said.
"September's reading points to a lackluster 2007 fall freight season, which traditionally starts in mid- to late August and peaks in October. We are sticking with our economic forecasts that point to below trend growth for the overall economy and truck tonnage."
STB Proposes Paper Barrier Rules
Shippers moving freight on short line railroads may be able to challenge "paper barriers" that lock in their cross-country traffic to a single carrier; however, they'll have to fight their way one deal at a time, the Surface Transportation Board ruled recently. The ruling was closely watched by shippers and carriers anxious to see how the STB would tilt on an action that is part of a broad array of cases touching on the balance between shipper and carrier interests at the regulatory board. In this case, the STB appears to have taken a step, although apparently only a short one, toward giving shippers a greater opportunity to challenge railroads. Paper barriers arise when a large railroad sells a section of track to a short line owner but requires current freight from that section to stay with the previous track owner.
Shippers say this holds them captive at much higher charges than if their short line could hand off their loads to a second long-haul railroad. The STB opted not to set strong curbs on those clauses or determine them broadly to be unreasonable, as sought by the Western Coal Traffic League, a coalition of utilities, but said it should "consider the propriety of interchange commitments on a case-by-case basis" as shippers challenge them. To aid shippers in challenging the agreements, the STB proposed new discovery rules on existing interchange deals and disclosure of the terms of any new ones so regulators can review them before agreeing to line sales.
Consumer Confidence Drops in October
U.S. consumer confidence fell in October to the lowest level in 17 months, according to the University of Michigan's latest consumer sentiment index.
The final index for October fell to an 80.9 reading, from 83.4 in September, which is the lowest since May 2006. A preliminary October index released two weeks ago showed an 83.8 reading. Economists had forecast a reading of 82, according to Bloomberg. This drop in consumer confidence is of concern to many NASSTRAC members, given a significant number of members are in manufacturing and retail - sectors which are affected by overall consumer purchasing power.
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