FTR Trucking Conditions Index in May is in line with previous months

By Jeff Berman, Group News Editor
July 10, 2013 - LM Editorial

Trucking conditions in May remained in line with April, according to the Trucking Conditions Index (TCI) released today by freight transportation consultancy FTR Associates.

In the TCI report, FTR said its reading for May was 12.4. The TCI reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight.

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. May represents the fifth straight month that the TCI has been above ten, with March and April coming in at 13.12 and 13.8, respectively.

“The trucking industry has seemingly been stuck in a holding pattern for the last year or so,” said Jonathan Starks, director of transportation analysis for FTR, in a statement. “Rates have only moved slightly higher and freight growth, while strong at the end of 2012 and early in 2013, has generally been modest. Barring an external change in the marketplace we believe that the HOS changes, in conjunction with the other numerous regulations already implemented or soon to be, will be enough to change the supply and demand equation in favor of the truck fleet. That is why we expect a noticeable uptick in rates by the end of the year. The weaker manufacturing sector has probably limited any chances of seeing a true capacity crisis in 2013—we need some additional economic growth to envision that possibility.”

FTR officials have previously said that the TCI includes what they describe as a forward-looking component, which is pushing the TCI level up. And they said that continued moderate growth in conjunction with HOS and other regulations, will cause trucking rates to firm up in the coming months and improve carrier profitability.

Similar thoughts have been echoed throughout the industry in recent months. At last month’s National Shippers Strategic Council (NASSTRAC) Annual Conference, various carriers cited capacity cuts of 3 percent or more due to HOS, coupled with the vast majority of carriers noting they have no plans to increase assets or related equipment, other than on a replacement basis. 

FTR Senior Transportation Consultant Larry Gross recently told LM 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.



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

Putting the renewed strength in the truckload market into a very positive perspective is a report issued by Avondale Partners analyst Donald Broughton, which was released yesterday. Entitled, “Q2’15 Trucking Capacity; Goldilocks Era Continues,” Broughton explained that in the second quarter only 70 truckload fleets failed, or exited the business. That number may seem high to some, but it is not, especially when you consider that the second quarter of 2014 saw more than five times as many truckload carriers, 375 to be exact, exit the business.

Global demand remains stable as packaging equipment providers of all sizes shift focus

Six straight days without a ship waiting for berth

Freight forwarders were relieved to learn yesterday that U.S. Customs and Border Protection (CBP) would be delaying its Automated Commercial Environment (ACE) implementation.

The Institute for Supply Management’s (ISM) August edition of the Manufacturing Report on Business saw its PMI, the ISM’s index to measure growth, fall 1.6 percent to 51.1, following a 0.8 percent decline to 52.7 in July. Even with the relatively slow growth over the last two months, the PI has been at 50 or higher for 31 consecutive months.

Article Topics

News · Trucking · FTR Associates · TCI · All topics

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