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

Shippers and other ocean cargo carrier stakeholders should be cheering the announcement made today by The U.S. Coast Guard, as it formally notified the International Maritime Organization through a Declaration of Equivalency that the United States position on SOLAS is that there are multiple methods to submit the combined cargo and container weight (Verified Gross Mass or VGM).

The proposed $4.8 billion acquisition of TNT Express N.V. by FedEx took a major step closer to becoming official today, with the company and TNT announcing today that they have received unconditional approval of the offer from the Ministry of Commerce People’s Republic of China (MOCFCOM).

March shipments at 798,180 trailed February by 12 percent and were down 19 percent annually. For the entire first quarter, shipments were relatively flat annually, rising 0.27 percent to 2,587,988.

OCEMA says it has placed a priority on working with other stakeholders to find operational solutions that will help U.S. exporters, carriers, and marine terminals prepare for the implementation of the SOLAS Verified Gross Mass (VGM) rule.

The first quarter is typically the slowest period of freight demand for LTL carriers. With a few notable exceptions, that was reflected in first quarter earnings reports of the major publicly held LTL carriers.

Article Topics

News · Trucking · FTR Associates · All topics

Comments

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


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA