Trucking conditions improving, likely to get better
FTR’s Trucking Conditions Index (TCI) for February reflected an increasingly improving outlook for trucking with another month-over-month increase of 2+ points to a reading of 12.9.
The upward movement of the index is a strong sign of positive momentum in the truck industry, the company says. The TCI is designed to summarize a full collection of industry metrics, with a reading above zero indicating a positive environment for truckers. Readings above 10, as they are now, signal that volumes, prices, and margins are likely to be in a solidly favorable range for trucking companies.
“The majority of indicators through the early part of 2013 have been solidly favorable for trucking,” Jonathan Starks, director of transportation analysis for FTR, says. “The lone outlier is truck freight rates, which have been stable but have shown very little growth since early 2012. We expect that situation to change once the new HOS rules go into effect in July. Industry capacity and demand for truck freight services are currently very close to equilibrium and it will not take much to move the needle to a supply shortage that should benefit truckers.”
FTR predicted there will be no delay in the July implementation of the revised Hours of Service (HOS) rules. This and other regulations affecting hauling capacity along with improving freight will tighten capacity allowing truckers to push rates higher.
FTR’s TCI upward movement is expected to peak during the summer but remain strongly positive for some time.
The Trucking Update, published monthly, is part of FTR’s Freight Focus Series and reports data that directly impacts the activity and profitability of truck fleets.