Metrics gauging the overall health of the trucking industry continue to stay in positive territory, with the outlook for freight carriers set to stay strong well into next year.
According to research firm FTR Associates, its Trucking Conditions Index (TCI) edged higher in August to a reading of 2.3 – the sixth consecutive reading in positive territory, reflecting a healthy environment for trucking, noted Eric Starks, FTR’s president.
“Basically any reading above zero means we’re in healthy territory for truckers,” he told Fleet Owner. “While 2.3 is not a fantastic number, it does mean things are good for the industry.”
Starks explained his firm’s TCI is designed to take the “pulse” of trucking in general, relying on 15 different data points in order to remove misleading variables. The major metrics that make up the TCI include freight volumes, active truck utilization, fuel prices, the cost of capital, and bankruptcies.
According to Starks, freight and active truck utilization are both up, while fuel prices and costs of capital remain stable, with trucking bankruptcies decreasing.
“Broadly speaking, the trucking industry is doing OK,” he said. “Some fleets are obviously doing better than others, but by and large, the industry is in a good position.”
FTR noted that increased manufacturing activity is generating truck freight well above U.S. gross domestic product (GDP), with freight growth at 4% while GDP hovers around 2.5%. Limited truck capacity and a lack of drivers along with fleet downsizing over the past two years – which reduced available capacity 25% to 35%, according to FTR’s data – will keep the TCI in positive territory through 2011, Starks said.
“Conditions for trucking are positive in spite of sluggish growth in the overall economy because manufacturing, which generates freight, is growing much more rapidly than services,” he added. “The freight growth along with capacity shortages we have been forecasting bodes well for trucking companies over the next couple of years at a minimum.”