Truck News


US trucking conditions still positive, but shippers pushing back on rates: FTR

BLOOMINGTON, Ind. — Trucking conditions in the US remained in “modestly positive territory” in February, as measured by the FTR Trucking Conditions Index.

The reading of 7.4 reflected a softening capacity utilization thanks to the hours-of-service suspension, as well as fluctuating diesel prices.

However, FTR says the index is likely to rise into the summer months and beyond, and could hit double-digit positive readings before 2016 as the result of another round of regulations and the resulting drag on trucking productivity.

FTR also warns the index would jump dramatically if the HoS rules currently under suspension are reinstated in September.

“We are beginning to hear of pushback from shippers about the continued rise in freight rates,” said Jonathan Starks, director of transportation analysis with FTR. “While we still expect all-in per mile rates to be fairly flat for most of 2015, base rates for trucking (and specifically contract rates) are still showing solid year-over-year gains. Shippers are seeing two items that cause them to question the continued increases: fuel costs and spot market activity.”

Starks said shippers are wondering why a 40% decline in fuel costs hasn’t been reflected in trucking rates.

“The decade-long gain in acceptance of fuel surcharges has made most of that impact a direct pass-through to the shipper. It just isn’t going to show up in base rates any more,” Starks pointed out.

“The other item is that spot market rates are well below last year’s levels. There is just one word for why this happened: weather. Spot market rates jumped 20%+ during parts of 2014 due to the lasting impact of the Polar Vortex. While parts of the US have had severe weather this winter, it has not been nearly as expansive as what we had a year ago. After accounting for the drop in fuel during the year, spot rates are only down modestly during 2015, but this is opposed to the gains being seen for dedicated and contract rates. It takes careful explanation to educate shippers on why trucking costs are going up – but it is certainly a necessity in order to attract and retain quality drivers. And drivers are something that both carriers and shippers want.”


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1 Comment » for US trucking conditions still positive, but shippers pushing back on rates: FTR
  1. Will says:

    Shippers will complain about the cost of shipping their goods no matter the rate. It has always been the trucking companies that have to take the hit and when they don’t they are said to be bandits. Between the oil industry gouging consumers for fuel and the excessive cost to repair these units and the shippers wanting it shipped for nothing, who is the bigger bandit. Trucks make the economy go and without them you stop shipping, so suck it up.

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