BLOOMINGTON, Ind. — Trucking conditions in the US improved in November, thanks to falling diesel prices and strong holiday freight volumes, FTR reports.
The FTR Trucking Conditions Index read 8.98 in November reflecting tight capacity and favourable conditions for truckers. FTR expects the index to remain in this range t hrough 2015 before dropping somewhat when the effects of the revised hours-of-service are felt.
“With a new year comes new issues to deal with, but the old ones haven’t gone away,” said Jonathan Starks, director of transportation analysis with FTR. “Or have they? Diesel fuel prices have dropped nearly 20% over the last year, and nearly all of that drop has occurred over the last six months. After a year that started with severe weather, which kept truck capacity limited until summer, December brought welcome relief as the congressional budget bill removed one of the restrictions keeping driver productivity down. Finally, an economic recovery that couldn’t seem to gain any traction rebounded in the second quarter and then accelerated in the third quarter, hitting 5% in Q3 – a level not achieved since 2003, and the strongest two quarters of growth this recovery.”
The single biggest factor to improve trucking conditions has been the decline in diesel prices, Starks noted.
“The drop in diesel prices is a dramatic change in the operating environment for carriers after a four year span in which fuel prices were nearly stagnant. This drop is the single biggest contributor to November’s improvement in the TCI and is expected to continue to push the TCI higher when the December results are in. Conversely, carriers will take a hit to margins when fuel costs inevitably rise. It remains to be seen if the drop in fuel costs will benefit rate negotiations in early 2015.”
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