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New Regs Expected to Tighten Capacity to Truck Fleets’ Advantage

October 28, 2016 By: Trucking News Staff Tags: Fleet Management, News
New Regs Expected to Tighten Capacity to Truck Fleets’ Advantage

FTR’s Trucking Conditions Index (TCI) for August increased from July to a reading of 6.76. The TCI is continuing a steady rise that is expected throughout 2017 as new regulations tighten capacity resulting in better pricing and margins for trucking companies.

This improvement is largely from the supply side, as the economy and freight markets are currently in a slow-growth phase with unclear direction typical of a late recovery environment. The TCI is expected to peak in early 2018.

Jonathan Starks, chief operating officer at FTR, said, “The July and August increases in the Trucking Conditions Index were led by positive changes in capacity utilization and fuel prices. Fuel prices look to have stabilized during the fall and are unlikely to have a big impact on transportation markets until oil prices move substantially away from $50 per barrel.

“Also, despite the weak reports from the public TL carriers, utilization of the overall fleet is showing some moderate improvement. This trend is likely to be subdued until mid-2017 when we get close to the implementation data for electronic logging devices. The third quarter is likely to be the nadir for weak reports, and we should begin to see economic improvement, easier year-over-year comparisons, and better overall market conditions as capacity tightens up due to regulations.

Starks said spot market conditions are beginning to affirm this, with the dry van market on Truckstop.com showing positive year-over-year comparisons for both load volumes and rates.

Details of the August TCI are found in the October issue of FTR’s Trucking Update. The Notes by the Dashboard Light commentary in the current issue suggests caution in spite of currently strong economic indicators. The Trucking Update also includes data and analysis on load volumes, the capacity environment, rates, costs, and the truck driver situation.