Subscribe to our free, weekly email newsletter!


FTR Trucking Conditions Index for January is down slightly from December

By Staff
March 05, 2012

Data released today by freight transportation consultancy FTR Associates showed that conditions impacting the trucking market in its Trucking Conditions Index (TCI) dipped slightly from December to 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, came in at 6.1 in January, which was down slightly from December’s 7.0 and snapped a three-month growth streak.

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.

“The spike in the price of diesel due to Mideast tensions is one factor that has pulled the TCI down recently and downside pressure will continue until the price stabilizes,” said Larry Gross, FTR senior consultant, in a statement. “However, barring a significant economic slowdown from an external factor such as an actual Mideast confrontation, the fundamentals for the trucking industry are expected to continue to strengthen throughout the year, and we could well see a surprise on the upside if important sectors such as automotive and even housing continue to improve.”

While fuel is acting as a wildcard at the moment, carriers are still in a favorable position for rates, due to 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.

Gross recently noted 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 result.

FTR added that even with a slower than expected start with the January TCI it expects a slow climb to positive territory throughout 2012, “with volumes and profits sufficient for investment for growth by year’s end.” 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

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!

Recent Entries

Join Industry Expert Adrian Gonzalez for this educational webinar on the tenets and the benefits of Closed-Loop Operational Management. You’ll learn how Closed-Loop Operational Management optimizes orders, inventory, and transportation concurrently, and how it is able to optimize large-scale problems on a daily basis.

In a separate conference call following CP’s third quarter earnings release call yesterday, CP CEO Hunter Harrison make myriad convincing points for a merger between CP and CSX and offered up his take in general industry M&A as well.

Seasonally-adjusted (SA) for-hire truck tonnage in September checked in at 132.6 (2000=100) for the second straight month, remaining as the current all-time high level for the second month in a row, with November 2013’s 131.0 now the second best month recorded.

Ahead of its third quarter earnings call this Friday, freight transportation and logistics titan UPS rolled out rate increases for 2015 that are set to take effect on December 29, 2014.

The 'Internet of Things' or IoT is a term that has rapidly taken center stage in business and consumer technology circles, with tremendous amounts of hype in both. Don't be distracted if some of the hypothetical consumer examples of the IoT seem far-fetched; the trend has serious implications for businesses. This complimentary whitepaper takes a look at some of the opportunities afforded by the Internet of Business Things.

Article Topics

News · Trucking · FTR Associates · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA