Truck loads and digitalization
26 May 2021
Truck Tonnage and Stock Market
The Truck Tonnage Index (TTI) is a monthly indicator that calculates the gross tonnage of freight transported by motor carriers in the U.S. It tracks shipping activity and is used to assess the state of the U.S. economy. The charts here compare the TTI with the S&P500 and the Industrial Production: Manufacturing (ISM).
Trucks transport over 70% of all freight.
The stock market is generally influenced by overall economic activity.
Truck Transport and Economy
As highlighted by the bottom chart, the TTI usually moves in tandem with the broad economy (here shown through the manufacturing component of industrial production), given transport of goods is a necessary step for their production and consumption. A surge or decline in economic activity will thus show in the TTI.
However, the TTI will not be impacted by changes in consumption of services.
The Shift to Technology
The weight of services on the overall economy is constantly increasing, as we transition towards a digital and technological driven society. Both charts start to diverge significantly post-Covid. The pandemic massively accelerated the digital and technological transformation of our society and economies.
Is the divergence between the TTI and the S&P500 just the result of the supply chain disruption lowering the amount of goods transported, or is it rather indicating that a massive shift to technology is occurring?
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