Freight tonnage falls in May

Declining retail sales are beginning to impact the transportation industry. The American Trucking Association recently reported that its For-Hire Truck Tonnage Index fell 0.7% in May. This follows a 1.1% decline in April.

"Two straight months of contractions is disappointing," ATA chief economist Bob Costello said.  "The drops in tonnage are reflective of the broader economy, which has slowed. The good news is that the decrease in fuel prices will help support retail sales going forward, which is a big part of truck tonnage."

In fact, according to the Annual State of Logistics report, trucking companies now have more control over their rates. A high driver turnover rate is increasing the cost of each shipment as companies try to balance less freight with fewer available routes.

As the economy continues to struggle, companies will look to optimize their supply chain network to save money. Effective transportation management can provide firms with an advantage over the market, increasing their ability to expand. A recent study by UCLA showed that California's economy was unlikely to see any recovery until next year. This finding could encourage companies to continue to focus on their core business and minimize costs.

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