Key trucking index shows demand still falling

The trucking industry's main trade group said Tuesday a key index measuring U.S. trucking shipments fell by 2.2 percent last month, indicating the industry _ and perhaps the broader economy _ still has further to fall.

Trucking shipment data is often a gauge of overall economic health, because truckers haul more than two-thirds of all U.S. manufactured and retail goods.

The American Trucking Association's advance seasonally adjusted truck tonnage index fell 2.2 percent in April, after plunging 4.5 percent in March.

Compared with April 2008, tonnage shrank 13.2 percent, marking the worst year-over-year decrease of the current cycle and the largest drop in thirteen years.

ATA Chief Economist Bob Costello said truck tonnage is getting hit from both the recession and retailers that are holding off ordering in favor of working through existing inventory.

"While most key economic indictors are decreasing at a slower rate, the year-over-year contractions in truck tonnage accelerated because businesses are right-sizing their inventories, which means fewer truck shipments," Costello said. "The absolute dollar value of inventories has fallen, but sales have decreased as much or more, which means that inventories are still too high for the current level of sales. Until this correction is complete, freight will be tough for motor carriers."

Costello added that it could be a few more months before truck freight hits bottom.