Carriers seeing most favorable rate environment in 14 years: FTR

by Truck News

BLOOMINGTON, Ind. – Trucking conditions in the U.S. continued their upturn in January, as demand remained well above supply according to the FTR Trucking Conditions Index.

An 11.5 reading showed maxed out capacity and rate increases for carriers. Trucking conditions have been unusually strong in the first quarter, with carriers approaching the most favorable environment they’ve seen in 14 years, FTR reported.

Full enforcement of the electronic logging device (ELD) mandate in April should continue the trend and keep the index in double digit territory, FTR predicts. However, it warns the market may soften later in the year as increased labor and equipment costs and slowing rate growth come to bear.

“Historically, January and February have proven to be lighter months in terms of the shipping environment, resulting in less truckload demand. That is not the case this year.’s Market Demand Index is twice the level of January and February 2014, the last time capacity pressures were building up in the system. Carriers continue to hold a dominant position in the market,” said Jonathan Starks, chief operating officer at FTR.

“We continue to see a combination of factors that are keeping the market tight, including the full ELD implementation coming on April 1, as well as a strong run in the economic data month after month relating to industrial production, GDP, home building, and sales. One possible effect of the increased freight demand and accelerating rates is that less drivers seem to be leaving trucking due to ELDs than many anticipated. However, we need to wait for enforcement data in May to see if drivers are adopting ELDs, or just running loads without them.”

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