Transportation-forecasting firm FTR has advised that the industry outlook derived from its latest Trucking Conditions Index (TCI) data has “moderated,” yet remains “still in solidly positive territory” with a May reading of 5.74.
The TCI “reflects some headwinds” that are affecting truck-fleet results, the firm pointed out.
According to FTR, “modest recovery growth along with the lack of acceleration in contract-rate increases are accompanied now by increased labor and recruiting overhead costs,”
In addition, the firm noted that “a near-capacity crisis environment through May is expected to have eased somewhat in June.”
“While still robustly positive, the TCI has moderated recently and reflects some of the challenges currently facing the industry,” commented Jonathan Starks, FTR’s director of transportation analysis.
“Capacity is tight,” he continued, “but it has moderated from the critical level that we operated in during and just after the winter months.”
Starks described freight rates as “seeming to be a tale of two cities” as contract rates are “very stable and only showing modest growth, yet spot-rate activity has been quite strong since winter hit and has not let off since then.
“If economic growth continues to remain modest,” he continued, “then we would expect the status quo to persist for some time; however, if the economy finally shows a strong growth spurt in 2014 there isn’t sufficient surge capacity in the truck market to be able to easily accommodate that growth.
“When combined with the inability to quickly add more drivers into the industry,” Starks added, “we would then expect rate growth to accelerate in both the spot and contract markets.”
Details of the May TCI Index are found in the July issue of FTR’s Trucking Update, published on June 30th. The “Notes by the Dashboard Light” commentary within discusses oil prices and how they may impact the economy and trucking. The Trucking Update also includes data and analysis on load volumes, the capacity environment, rates, cost, and the truck-driver situation.
Trucking Update, published monthly, is part of FTR’s Freight Focus series. It reports data that directly impacts the activity and profitability of truck fleets. As part of Trucking Update, FTR forecasts expected trends in this data and the probable short- and long-term consequences.
