FTR data points to improving trucking market conditions

By Jeff Berman, Group News Editor
February 02, 2011 - LM Editorial

As the economy shows some signs of improvement, the trucking market may be somewhat ahead of the curve, according to the most recent edition of the Trucking Update by FTR Associates, a freight transportation forecasting firm.

In the Trucking Update, FTR stated that its Trucking Conditions Index (TCI), which reflects tightening conditions for hauling capacity, increased to 7.1 percent in January, marking its highest recorded level during the economic recovery.

The TCI is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight.

Company officials added that the TCI is likely to increase throughout this year and may hit a new record in early 2012, noting that current readings, coupled with the forecast for the next few years, “bodes well for increased vehicle utilization and solid pricing power for carriers through the period.”

“The biggest thing we are looking at is the tightening of capacity,” said FTR President Eric Starks in an interview. “As CSA (Comprehensive Safety Analysis) continues to get implemented and pulls more and more drivers out of the system, it is keeping the carriers honest and pushing them to make needed changes now rather than later. It is impacting the driver pool and starting to tighten capacity. If you don’t get the right driver to put into a truck, the truck gets parked and carrier networks are then not running active capacity.”

Given the CSA situation, coupled with likely changes to truck driver Hours-of-Service, Starks said that capacity is likely to be tight for the balance of this year. And by the end of the year he said there will be 100 percent utilization of active vehicles in the marketplace, meaning that every available truck driver will be on the road moving freight.

This high level of equipment utilization will also drive rates up, said Starks.

Tightening capacity at the moment, said Starks, is more of an issue on the truckload side than the less-than-truckload (LTL) side, although he noted there are some signs of capacity imbalance on the LTL side but not to the level seen for truckload.

“The pressure is mainly on the truckload sector,” he said. “As business activity picks up, though, we think the LTL sector will be impacted, too. The freight environment in the fourth quarter was somewhat stagnant, but as things move forward it will accelerate through this year and that is a good thing.”

Another factor weighing into the overall trucking outlook is fuel, which continues to move higher and can become a negative if it is not budgeted correctly, explained Starks. And even with the noticeable progression in price increases in recent weeks, it is not a major hindrance at this point.

For more articles about FTR Associates, please click here.



About the Author

Jeff Berman headshot
Jeff 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. .(JavaScript must be enabled to view this email address).


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

Transportation stakeholders reliant on North Carolina’s major seaports are welcoming news this week, which outlines plans to enhance the intermodal and cold chain network in the region.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 56.9 in February, which was 0.2 percent ahead of January and also 0.1 percent ahead of the 12-month average of 56.8. Economic activity in the non-manufacturing sector has grown for the last 61 months, according to ISM.

Non asset-based third-party logistics (3PL) services and logistics technology services provider Transplace said today that Brooks Bentz has joined the company in a newly-created role as president of Transplace Consulting in conjunction with the launch of the company’s new North American consulting services practice.

The advent of e-commerce continues to grow and gain increased traction over time. The many ways for consumers to order and purchase goods online continues to expand and leads to various subsequent byproducts of online purchases, including shopping through multiple channels, and delivery and payment options, among other things. These types of topics serve as the thesis in the second annual UPS Pulse of the Online Shopper Global Study issued this week by UPS and comScore Inc.

A major highlight of CEVA’s fourth quarter performance was its new business wins, which were up 14 percent for all of 2014, with Freight Management wins up 14 percent, and Ocean Freight and Air Freight wins up 30 percent and 14 percent, respectively, while Contract Logistics wins were up 2 percent.

About the Author

Jeff Berman, 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.

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA