FTR Associates cites improving trucking market based on January data

An improving market in the trucking sector is apparent, according to the most recent edition of the Trucking Update from FTR Associates, a freight transportation forecasting firm. FTR said that its Trucking Conditions Index (TCI), which is a compilation of factors affecting trucking, ticked up to 9.1 in January from December’s 7.1, adding that the TCI has seen steady gains since last October.

By ·

An improving market in the trucking sector is apparent, according to the most recent edition of the Trucking Update from FTR Associates, a freight transportation forecasting firm.

FTR said that its Trucking Conditions Index (TCI), which is a compilation of factors affecting trucking, ticked up to 9.1 in January from December’s 7.1, adding that the TCI has seen steady gains since last October.

The TCI is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight.

According to FTR, continued economic growth, coupled with the impact of new safety regulations, will result in sufficient freight to stress capacity sustaining an upward trend in the TCI through the middle of 2012.

In an interview with LM, FTR President Eric Starks said various components of the trucking sector are moving in the right direction.

“The biggest thing here we are looking at is that this will accelerate expectations for the market,” said Starks. “If we are expecting to stay at the levels we are talking about, then it would be a good environment for the trucking industry and be something shippers can handle. But as this accelerates and moves higher, shippers are going to have a much tougher time.”

Drivers for a potentially tougher road ahead for shippers include increasing fuel prices, and tighter capacity, which could me a major issue as the year progresses.

Fluctuations in fuel prices by and large will not be a huge issue for truckers as they can pass those charges through to shippers, said Starks. But for the shipper, he said will be a major issue as they absorb, all—or a substantial portion—of those costs.

“You could potentially see shipper rates up 20-to-25 percent compared to what they were paying last year,” said Starks. “That would come from fuel costs, as well as increased base rates, with this type of rate increase being difficult for anyone to absorb.”

The current trucking environment is beginning to resemble how the market was in 2004, said Starks, with conflicts in the Middle East serving as a wildcard, which could create instability.

In 2004 and back to the middle of 2003, Starks explained that market conditions began to accelerate and gained momentum during the first quarter of 2004.

“Things happened quickly in a six-month timeframe, making it difficult for the industry to respond in an orderly fashion,” said Starks. “So what you saw was a bit of a perfect storm, with everything tightening on the capacity side for all modes being able to meet the needs of the shipping environment at that point. It was one of those things, which was difficult for all of the right reasons. Shippers themselves had a lot of demand with some artificial things baked in there. This time we are seeing a decent amount of freight, but there are also some issues with the regulatory environment that are going to constrain capacity.”

For more articles on FTR Associates, please click here.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo