DAILY NEWS May 10, 2013 10:47 AM - 0 comments

Trucking conditions continue to improve in March: FTR Index

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2013-05-10

BLOOMINGTON, Ind. -- Conditions improved on an already favourable environment for trucking in March, according to the latest results from FTR's Trucking Conditions Index (TCI), with a reading of 13.3 on the Index. The TCI is designed to summarize a full collection of industry metrics, with a reading above zero indicating a generally positive environment for truckers.  Readings above 10 signal that volumes, prices, and margins are likely to be in a solidly favourable range for trucking companies. 

Although, at the moment, the environment for truckers is only mildly favourable, the TCI includes a forward-looking component, and it is this aspect that is pushing the index higher, according to FTR officials. Continued moderate volume growth, when combined with the effects of new trucking regulations, including the Hours-of-Service revision slated to take effect July 1, will cause trucking rates to firm up substantially in the coming months, improving carrier profitability, FTR said.

"With enforcement of the revised Hours-of-Service regulations now less than 60 days away, shippers and carriers need to be preparing for the change. Although there is still a chance that the court will issue an injunction, this becomes less likely with each passing day. FTR estimates an overall productivity reduction of about 3% from the changes in Hours-of-Service, but this will vary widely depending on the characteristics of each carrier and shipper,” said Larry Gross, senior consultant for FTR.

“Removal of 3% of trucking capacity should be enough to start rates on a solid upward trajectory.  f regulators continue to roll out the additional regulatory changes already in the pipeline and freight continues to grow at even a moderate pace, tight conditions could continue for several years."


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