FTR reports gains in Trucking Conditions Index
January 10, 2013
Even though it may not entirely feel like it, market conditions for motor carriers appear to be on the upswing. That was the main theme of freight transportation consultancy FTR Associates’ November Trucking Conditions Index (TCI).
The TCI, which reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight, increased nearly two full points in November to 9.7.
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.
FTR said that November’s gain was expected in that conditions impacting trucking will continue to improve in anticipation of what it expects to be a tightened market in 2013, with the main driver of that expected to be increased utilization and an additional one-time hit from Hurricane Sandy rebuilding efforts.
“We were forecasting an improved environment for trucking even before the agreement just reached to avoid the ‘fiscal cliff,’” said Jonathan Starks, director of transportation analysis for FTR, in a statement. “There are still political hurdles to navigate in early 2013, but the agreement takes some of the uncertainty out of business plans. We’ll keep monitoring the economy closely to look for any renewed softness in demand, but for now we believe capacity will tighten during 2013.”
Even though this report is largely positive, many challenges remain for the trucking sector early into 2013, including ongoing issues and pushback regarding CSA and HOS, a still skittish economy and the lack of a consumer-led economy.
Some positive signs, though, include an improving housing market and gradually improving employment numbers.
FTR President Eric Starks recently told LM that the impact of Hurricane Sandy could remain intact for a while, too, for the next three-to-six months or so, with ongoing sales momentum for building supplies and related goods. The bigger issue, he said is whether or not consumers will continue to shop at malls and department stores.
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