Trucking Conditions Index jumps
FTR’s Trucking Conditions Index (TCI) for January as reported in the March 2013 Trucking Update climbed 2.2 points from the previous month to a new reading of 10.6.
The upward trend in the TCI reflects improved freight growth and expectation for tighter capacity and is forecast to continue at a high level as regulations affecting trucking utilization go into effect starting in mid-2013.
FTR expects conditions through 2014 to remain positive, with trucking companies’ ability to raise rates in a tight capacity environment a likely scenario. The Trucking Conditions Index is a compilation of factors affecting trucking companies. Any reading above zero indicates a positive environment for truckers. Readings above 10 signal that volumes, prices, and margins are likely to be in a solidly favorable range for trucking companies.
“While the sequester is now in effect, we have seen enough indications of an improving economy to expect a growing freight market in 2013,” Jonathan Starks, director of transportation analysis for FTR, says. “As regulators impose the changes to Hours of Service rules in July capacity will further tighten to levels not seen since 2004. Eventually, carriers will have the ability to raise rates but their costs, especially in driver pay, will increase as well.”