FTR Associates data points to an improving trucking sector

Based on the most recent reading of FTR Associates’ Trucking Conditions Index (TCI), it appears that the trucking sector is showing some signs of solid growth.

By ·

Based on the most recent reading of FTR Associates’ Trucking Conditions Index (TCI), it appears that the trucking sector is showing some signs of solid growth.

The TCI, which reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight, was at 9.1 in April, the most recent month for which data is available.

This 9.1 reading is a positive indicator for the market. According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above ten indicating that volumes, prices, and margin are in a good range for carriers.

And it is above the previous three months, which saw the TCI register at 6.1, 5.9, and 7.0 in March, February, and January, respectively.

FTR Senior Consultant Larry Gross said in a statement that while volume growth is modest, but with the industry not adding capacity, modest freight growth is leading to firm rates.

“Although there is a fair amount of volatility in the TCI from month-to-month, and we would not preclude some near-term decline, we expect an overall gradual improvement in trucking conditions through the balance of 2012 and into 2013,” said Gross. “This is based on our expectation for higher rates, supported by continued modest growth in freight volume and tightening driver supply due to the implementation of new government regulations.  Lower prices for diesel are another factor currently working in the truckers’ favor.”

As LM has reported, there are multiple factors at play which are positive for carriers, including fairly tight capacity, a limited driver pool, and regulations like CSA and HOS (set to kick in next year) working in tandem to create an environment in which many shippers are chasing the same carriers for freight.

In a previous interview, Gross said that even with mild economic growth, overall conditions are likely to be tempered for shippers, adding that if the recent spate of good economic news translates into more robust economic growth, capacity would tighten significantly and greater upward pressure on freight rates will come as a result.

The firm also said that the rebounding U.S. economy is expected to produce at least a 3.9 percent gain in truck freight that would top overall GDP performance.


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!

Article Topics

FTR Associates · Trucking · All Topics
Latest Whitepaper
Revisiting Supplier Relationship Management to Boost Real Value in the Supply Chain
Supplier relationship management (SRM) initiatives are on the rise, and companies who successfully implement these programs can realize a significant return on their technology investments.
Download Today!
From the May 2017 Issue
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management, but what sort of technologies fall under these broad terms, and how will they change the management capabilities at our disposal? To find out, we talked to some noted supply chain analysts, consultants and technology executives and gathered six digital trends to watch.
Transportation Trends and Best Practices: The Battle for the Last Mile
2017 Technology Roundtable: Are we closer to “Intelligent” Logistics?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Going Beyond Rate Negotiations for Logistics Cost Savings
The pressure to reduce cost is a fundamental part of every organization today leaving many supply chain professionals constantly renegotiating rates. This webcast examines four areas that may hold untapped savings potentials and even help organizations negotiate better rates.
Register Today!
EDITORS' PICKS
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...

LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...