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.”
Naturally, a tonnage slowdown is bad news for truckers. Investors who are into the relative game can play the non-asset based names like Landstar (NASDAQ:LSTR) and CH Robinson (NASDAQ:CHRW). Those who simply prefer positive absolute returns may want to steer clear of the whole group.