FTR Trucking Conditions Index down in February from January
April 04, 2012
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.
Subscribe to Logistics Management magazine
entire logistics operation. Start your FREE subscription today!