US trucking conditions strengthening: FTR

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BLOOMINGTON, Ind. — Trucking conditions in the US continue to strengthen, according to the latest Trucking Conditions Index from FTR.

The July index reading of 8.41 represented a 30% improvement over June. The index reflects a forward look at an expected uptick in pricing as capacity tightens due to regulatory effects and freight demand remains decent, FTR reported.

FTR is projecting a “modest peak in freight growth in the late fall of 2013,” before demand reverts to the slow growth trend experienced in 2012 and early 2013.

Trucking Conditions Index readings of above 10 signal that volumes, prices and margins are solidly in favour of trucking companies.

“There still remains very little hard evidence of the impacts from the recent introduction of new Hours-of-Service rules on July 1, but anecdotal accounts and very early data are starting to show some potential impacts,” said Jonathan Starks, director of transportation analysis for FTR.

“Unfortunately, freight demand has remained lackluster with very little movement up or down outside of normal seasonal activity. There is potential for a decent fall peak shipping season as the ISM manufacturing index is strong and inventories remain relatively lean, but the continued slog of the overall economy makes it unlikely that we get the significant push in consumer activity that is needed to really start moving the needle on capacity constraints and upward rate activity. Should any decent economic growth occur it should quickly show up in truck activity and tighten a market that has very little spare capacity. The potential for an extremely tight truck market remains but is dependent on those external factors.”

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