April’s Freight Transportation Services Index largest drop since Great Recession
June 11, 2020
The Freight Transportation Services Index, which measures freight movement in tons and ton-miles, experienced the largest decline since the 2009 Great Recession. Truck tonnage saw its largest decrease on record.
In April the Freight Transportation Services Index dropped by 7.7% to 125.1 when compared with March. Compared to April 2019, the index decreased by 10%. In the previous two years, the Freight Transportation Services Index in April increased year to year. In April 2019, it rose by 2.7% preceded by an 8% increase in 2018.
The monthly decrease is the largest since March 2009 when the Freight Transportation Services Index dropped by 5%. It is also the third consecutive decrease and the sixth decline in eight months. Consequently, the index is more than 11% below the all-time high of 141.2 set in August 2019. April’s index is the lowest since March 2017.
However, the Freight Transportation Services Index is still nearly 32% higher than the low in April 2009 during the recession. At that time, the index was 94.9.
Month-to-month truck freight took its biggest hit in April, dropping by more than 11% to a 104.5 tonnage index. That is the largest monthly drop since the Freight Transportation Services Index began collecting data in 2000.
The next largest drop occurred in March 2000. Then, the index dropped by more than 7% from 79.8 to 74.1.
The American Trucking Association’s numbers reflect a similar downward spiral. According to ATA’s for-hire truck tonnage index, numbers went down by more than 12% to 104.9 in April. That is the largest monthly drop in 26 years when there was a labor strike in April 1994, according to ATA.
“These historic declines show just how much trucking was impacted by our national response to the COVID-19 pandemic” Bob Costello, ATA chief economist, said in a statement. “As the nation starts taking small steps toward reopening, we should see some modest improvements in the freight market, but the size of April’s decline gives us an idea of how long the road back may be.”
Vehicle miles traveled were also down significantly in April. Nearly 161 billion miles were traveled, down by more than 27% from March. That is the largest decrease since at least January 2000. March experienced the second-largest decrease with nearly 20% fewer miles traveled compared to the previous month. April and March’s VMT declines are the largest since 2000 by a large margin. The third-largest monthly drop in VMT came in December 2000, when it went down by relatively scant 2.2%.
The Freight Transportation Services Index, released by the Bureau of Transportation Statistics, measures the month-to-month changes in for-hire freight shipments by mode of transportation in tons and ton-miles, which are combined into one index. The index measures the output of the for-hire freight transportation industry and consists of data from for-hire trucking, rail, inland waterways, pipelines and air freight. The Transportation Services Index is seasonally-adjusted to remove regular seasons from month-to-month comparisons.