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FTR’s Trucking Conditions Index edges higher

Has the capacity crisis arrived?

BLOOMINGTON, Ind. — The US is now in capacity crisis territory with price increases and service lapses occurring, according to the July Trucking Conditions Index, published by industry analyst FTR.

The July reading was 8.49, one of the highest points of the year. If the US economy accelerates as expected, the index could go higher this year, FTR reports.

Truck utilization remains within 100 basis points of record levels, meaning any additional growth in the economy and associated freight will strain capacity even further, pushing shipping costs higher.

“When looking at the truckload market, for much of 2014 it has been a tale of two markets with spot activity very strong, especially in rates,” noted Jonathan Starks, FTR’s director of transportation analysis. “The contract market has been less robust but still sowing signs of stress on capacity, costs and rates. You can expect to see those two markets merge this fall as a shipper’s core carriers get further stressed and contract rates move higher. The public announcements of strong driver pay increases by fleets are a testament to this fact.

“Despite easing over the summer, spot rates are still elevated versus last year. Keep an eye on the spot rate as we head into September, as they will be an early indicator of capacity shortages and stress in the system.”


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Truck News

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