Trucking News Online

May’s FTR Trucking Conditions Index Unchanged

July 10, 2013 By: Trucking News Staff Tags: Fleet Management, News

Projecting a continued positive environment for trucking, FTR’s Trucking Conditions Index (TCI) for May remains unchanged from the previous month, according to the July 2013 Trucking Update.

Remaining at 12.4, the TCI is designed to measure and summarize a number of trucking industry metrics, with readings above zero indicating a positive environment for truckers. Readings above 10 — which they are now — signal that volumes, prices and margins are likely to be in a favorable range for fleets.

Jonathan Starks, director of transportation analysis for FTR, says the current positive TCI level is based on expectations of rising rates and margins due to tightening capacity conditions.

FTR expects these conditions to continue indefinitely — lasting until either the next round of trucking regulations are rolled out that will further tighten capacity, or an unexpected recession significantly reduces freight demand.

While the FTR analysis shows strong year-over-year volume growth in truck freight, monthly growth has slowed and that should persist over the next few quarters in part due to slowing industrial production.

“The trucking industry has seemingly been stuck in a holding pattern for the last year or so,” says Starks. “Rates have only moved slightly higher and freight growth — while strong at the end of 2012 and early in 2013 — has generally been modest. Barring an external change in the marketplace, we believe that the hours of service (HOS) changes, in conjunction with the other numerous regulations already implemented or soon to be, will be enough to change the supply and demand equation in favor of the truck fleet.

“That is why we expect a noticeable uptick in rates by the end of the year. The weaker manufacturing sector has probably limited any chances of seeing a true capacity crisis in 2013. We need some additional economic growth to envision that possibility.”