FTR: Truck capacity continues to tighten

Feb. 15, 2011
New data compiled by research firm FTR Associates indicates that trucking capacity continues to tighten, especially in the truckload sector. The firm’s shippers condition index (SCI) dropped to negative 8.8 in January; the most unfavorable reading for shippers yet seen during the current recovery, according to Noel Perry, FTR senior consultant

New data compiled by research firm FTR Associates indicates that trucking capacity continues to tighten, especially in the truckload sector. The firm’s shippers condition index (SCI) dropped to negative 8.8 in January; the most unfavorable reading for shippers yet seen during the current recovery, according to Noel Perry, FTR senior consultant.

“The SCI is our method for capturing the shipping environment in one easy-to-understand figure,” he explained. “The downward progression of the SCI should serve as a warning signal to shippers. While trucking capacity is currently adequate during the normally slack winter shipping season, looking forward we expect things to tighten up dramatically as freight demand picks up beginning in March.”

During FTR’s “State of Freight” webinar last week, Perry said that tonnage growth for truckload carriers should hover just below 5% for the first three quarters of the year, hitting 5% in the fourth quarter, he said yesterday.

While freight levels have been hurt by severe weather throughout most of the country over the last six week, “when the weather issues subside, that could bring a wild swing in demand, and we could see a real [truck capacity] shortage” by early spring, he predicted.

Overall economic growth combined with industry-specific regulations like the Federal Motor Carrier Safety Administration’s new Compliance safety Accountability (CSA) program and new hours-of-service rules should create a capacity shortage of about 200,000 trucks this year, according to his forecast.

That shortage will grow to 260,000 units in 2012, and shrink a bit to 150,000 units in 2013 as fleets respond by adding equipment and drivers, Perry said.

“A shortage of truck drivers, due in part to new government safety regulations, will be the key factor restricting the ability of motor carriers to expand capacity,” he noted. “That will result in higher rates and possible challenges in getting freight moved later in the year.”

About the Author

Sean Kilcarr | Editor in Chief

Sean reports and comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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