New statistics for March released by the Freight Transportation Services Index (TSI) produced by the U.S. Department of Transportation’s (DOT) Bureau of Transportation Statistics (BTS) show further deterioration in the freight market, although economists are divided on the repercussions.

“Since dropping to a recent low in September, the freight index has increased sharply in October and January, with each rise followed by a sharp drop two months later,” the report said. “At 109.4 in March, the freight TSI was up 1.3% in the six months since its recent low of 108.0 in September but down 3.3% from its peak of 113.1 reached in November 2005.”

The March TSI was 0.4% lower than March 2007, marking the third consecutive March-to-March decline and the lowest March level since 2003. According to DOT, the freight TSI measures month-to-month changes in the output of services provided by the for-hire freight transportation industries, consisting of data from for-hire trucking, rail, inland waterways, pipelines and air freight.

The report comes on the heels of an American Trucking Assns. report that said tonnage fell 3.3% in March, resulting in the largest month-to-month contraction since August 2006 and marking the lowest level since November 2007.

However, it is a small sample. “I usually don’t look at one-month data because one month is never enough to tell you anything,” Stephen Latin-Kasper, market data & research director for the National Truck Equipment Association (NTEA), told FleetOwner. “If we have a really good fourth quarter, on current trend, we could end up having similar numbers to 2008.”

Latin-Kasper said that although the index is still saying that freight is down from the previous year, the year-to-year cycle bottomed out roughly in the third quarter of 2007 and has begun to recover.

“The trend is declining at a declining rate, meaning it isn’t going down as much, and it is currently heading back towards positive territory, and may be positive by the third quarter of 2008,” Latin-Kasper added.

Other analysts are not as optimistic. “The freight environment is soft and it’s worrisome in the sense that nothing out there says there is going to be a turnaround,” analyst Chris Brady, president of Commercial Motor Vehicle Consulting (CMVC), told FleetOwner. “Export and agriculture is still good, but at the end of the day, it’s not enough to offset weak consumer spending.”

According to Brady, the household sector still has large imbalances and consumer spending remains poor. So while some segments are expanding, it isn’t enough overall.

“[The increase in] diesel prices is huge—incredibly high right now, and crude oil is still going up and doesn’t look like it’ll fall anytime soon. It’s a killer, further crushing profit margins. People are going to go out of business,” Brady said. “We need solid consumer spending, and it’s sluggish, and there’s no indication there will be an upturn. Not a good scenario right now.”

Yet some carriers remain positive. Speaking at the Wolfe Research Transportation Conference in New York today, Bruce Campbell, chairman, president & CEO of Forward Air. Corp., said “Flatbed has been strong, vans have not. The industrial side of the freight market has been staying strong due to the weak US dollar and stronger export…Owner-operators are harder to find now.”

Covenant Transport president & CEO David Parker said that his company’s revenue per truck for April and May is up 2%. “I sense something underneath is starting to happen. The next three or four months will show us something,” he said.

View more Fleet Owner management news and other commercial trucking-related articles.