BLOOMINGTON, Ind. – At a reading of 5.74, the FTR’s Trucking Conditions Index (TCI) in May is reflecting some of the difficulties affecting truck fleet results.
Modest recovery growth paired with the lack of acceleration in contract rate increases are now joined with more labour and recruiting overhead costs. This capacity crisis in May seems to have eased slightly in June, according to FTR.
Jonathan Starks, FTR’s director of transportation analysis, commented in a released saying: “While still robustly positive, the TCI has moderated recently and reflects some of the challenges currently facing the industry. Capacity is tight but has moderated from the critical level that we operated in during and just after the winter months. Freight rates seem to be a tale of two cities with contract rates 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 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 we would then expect rate growth to accelerate in both the spot and contract markets.”
Further details can be found in the July issue of the FTR’s Trucking Update.