FTR data points to improving trucking market conditions

As the economy shows some signs of improvement, the trucking market may be somewhat ahead of the curve, according to the most recent edition of the Trucking Update by FTR Associates, a freight transportation forecasting firm.

By ·

As the economy shows some signs of improvement, the trucking market may be somewhat ahead of the curve, according to the most recent edition of the Trucking Update by FTR Associates, a freight transportation forecasting firm.

In the Trucking Update, FTR stated that its Trucking Conditions Index (TCI), which reflects tightening conditions for hauling capacity, increased to 7.1 percent in January, marking its highest recorded level during the economic recovery.

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

Company officials added that the TCI is likely to increase throughout this year and may hit a new record in early 2012, noting that current readings, coupled with the forecast for the next few years, “bodes well for increased vehicle utilization and solid pricing power for carriers through the period.”

“The biggest thing we are looking at is the tightening of capacity,” said FTR President Eric Starks in an interview. “As CSA (Comprehensive Safety Analysis) continues to get implemented and pulls more and more drivers out of the system, it is keeping the carriers honest and pushing them to make needed changes now rather than later. It is impacting the driver pool and starting to tighten capacity. If you don’t get the right driver to put into a truck, the truck gets parked and carrier networks are then not running active capacity.”

Given the CSA situation, coupled with likely changes to truck driver Hours-of-Service, Starks said that capacity is likely to be tight for the balance of this year. And by the end of the year he said there will be 100 percent utilization of active vehicles in the marketplace, meaning that every available truck driver will be on the road moving freight.

This high level of equipment utilization will also drive rates up, said Starks.

Tightening capacity at the moment, said Starks, is more of an issue on the truckload side than the less-than-truckload (LTL) side, although he noted there are some signs of capacity imbalance on the LTL side but not to the level seen for truckload.

“The pressure is mainly on the truckload sector,” he said. “As business activity picks up, though, we think the LTL sector will be impacted, too. The freight environment in the fourth quarter was somewhat stagnant, but as things move forward it will accelerate through this year and that is a good thing.”

Another factor weighing into the overall trucking outlook is fuel, which continues to move higher and can become a negative if it is not budgeted correctly, explained Starks. And even with the noticeable progression in price increases in recent weeks, it is not a major hindrance at this point.

For more articles about 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
Private Fleet vs. Dedicated: Which one is right for you?
Having the right fleet for your business can give you an advantage over the competition and lower transportation costs.
Download Today!
From the April 2017 Issue
While adoption rates have remained relatively flat, yard management systems (YMS) are helping logistics operations turn that important space between the loading dock and the gate into a vital link in the supply chain.
Information Management: Wearables come in for a refit
2017 Air Cargo Roundtable: Positive Outlook Driven by New Demand
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Maximize Your LTL Driver Adherence with Real-time Feedback
This webinar shows how companies are using real-time performance data to optimize the scheduling of their city fleets, as well as the routing of their standard, accelerated and time-critical shipments.
Register Today!
EDITORS' PICKS
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...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...