US trucking conditions weaken in September: FTR

by Truck News

BLOOMINGTON, Ind. — Trucking conditions in the US deteriorated in September and could decline further at year end, according to FTR.

The industry forecaster says the trucking environment remains in a “fragile equilibrium between decent freight growth and lower, but still high, capacity utilization.” While FTR says price growth has been modest in 2015, it also says a more positive Trucking Conditions Index is expected in 2016.

“Inventory destocking, sluggish trade, and weak manufacturing have created an environment much different than last year for truckers and transportation professionals,” said Jonathan Starks, director of transportation analysis with FTR. “While overall capacity is relatively tight, there is a dichotomy between what is seen in the contract potion versus the spot market. As supply has increased relative to demand, loads have moved back to the contract and dedicated markets that ran out of excess capacity in 2014 due to regulations and weather.

“The spot market, on the other hand, is showing definite weakness, with load activity weak, truck supply up significantly, and rates down from prior year. Contract rates continue to rise, although they have started to show some slowing. The market is relatively stable, with the major risk coming from a potential slowdown in freight demand due to the items mentioned earlier. If slow growth in the economy continues, the next significant change in market conditions isn’t expected until fleets start implementing the coming regulations. That is likely to occur in the second half of 2016.”

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