The following document is a discussion and explanation of how FTR deals with data revisions and specifically addresses large changes in the FED Industrial Production numbers. We encourage industry participants to read it and gain a better understanding of how, and why, industry data changes on a regular basis (both historical and outlooks).
Even the most casual readers of our reports surely have noticed that our outlook for truck loadings varies from month to month. Early in any given year, you might even notice some small revisions in loadings activity for the prior year.
Detailed freight data regarding rail is readily available because about a half dozen carriers account for the bulk of volume. The Association of American Railroads collects and reports that data on a weekly basis.
Truck freight data does not work that way. You would have to combine hundreds of the largest carriers just to get to half the capacity in truckload, and there is no systematic reporting in any event. Regardless of the source, all industry-wide trucking volume data must be estimated in some way.
FTR’s forecasts of truck freight volume are based on a model – Freight•cast – that starts with a detailed economic forecast from which we estimate tonnage at the commodity level by mode and by stage of the supply chain from raw materials through retail sales.
In essence, FTR estimates truck tonnage by subtracting known volume in other modes from total tonnage. Freight•cast then calculates loadings for each vehicle type by applying industry standards for length of haul and average load size.
FTR runs this process monthly based on the latest economic data available, and our estimates and forecasts change – usually only incrementally (at least before the pandemic) – due to shifts indicated in the latest data.
Government agencies and other data sources often revise their prior data releases for a couple of months as they gather additional data for those prior periods. Those revisions usually are small, generally leading at most to minimal changes in FTR’s estimates of volume in previous months.
In addition to ongoing revisions in recent prior months’ data, some agencies issue annual restatement of their historical data going back years. One such revision (FED IP data) occurred at the end of May, and its effect on our data is worth highlighting.
