What the heck happened to the Convoy?
ATA: ATA Truck Tonnage Index Plummeted 3.6 percent in November.
“November 2006 marked the single worst month for for-hire truck tonnage since the last recession,” said ATA Chief Economist Bob Costello. “Both the month-to-month and year-over-year decreases indicate that the economic slowdown is in full gear. The most troubling number is the 8.8 percent contraction from November 2005, despite the fact that year-over-year comparisons are difficult due to the very robust volumes during the same month last year. One month certainly doesn’t make a trend, but if we continue to see year-over-year reductions of similar magnitudes in the next couple of months, it could indicate a greater economic slowdown than economists are projecting at this point.”
All jokes aside, the peak in truck tonnage was around January of 2005 [see chart on linked page], which is a few months before the housing situation reached it's own climax. The downtrend from Jan 2005 to now is pretty clear, and the recent numbers don't suggest a near term turnaround. Focusing on energy, in addition to the fuel that trucks themselves burn, the fact that there is less truck traffic (less trucks hauling stuff) also indicates that the economy is cooling down. The economy cooling down means less demand for energy, which generally means energy prices would fall. Of course, OPEC wants $60 and is trying to hold it there with production cutbacks. 2007 is going to be very interesting.
Look's like we got a bit more to worry about than some Smokies.
The Big Picture: Truck Tonnage Plummets.