FTR Trucking Conditions Index down in February from January
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 5.9 in February, down from January’s 6.1 and December’s 7.0.
in the NewsState of Logistics 2016: Pursue mutual benefit Don’t forget the three point stance. U.S.-NAFTA freight sees 10 percent annual decrease in July, reports BTS AAR reports annual declines for week ending September 17 How Lean is your Lean Quality Program? More News
Freight transportation consultancy FTR Associates reported this week that conditions impacting the trucking market in its Trucking Conditions Index (TCI) were down slightly in February from January.
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 5.9 in February, down from January’s 6.1 and December’s 7.0. January marked the end of a three-month growth streak for the TCI.
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.
“February is normally the softest month of the year in terms of trucking demand. Reasonably favorable conditions for truckers during the winter slack season bode well for later in the year, as demand increases seasonally to more normal levels,” said Larry Gross, FTR senior consultant, in a statement. “We expect pricing power to remain squarely on the side of the carrier in 2012.”
FTR officials said that the coming months are expected to show sequential strength through the remainder of 2012, with trucking freight volumes expected to grow at rates of 4 percent or better, which in turn will put pressure on available capacity while maintaining pricing power.
As LM has reported, there are multiple factors at play which are positive for carriers, including high fuel prices 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 AuthorJeff 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!
Time for Asia’s ports to rebuild Is the freight recession upon us…again? View More From this Issue