I’m going to once again lean on FTR for its insight into the freight market and where rates might be headed. Jonathan Starks, director of transportation analysis with FTR, had some good news when commenting on the industry forecaster’s most recent Trucking Conditions Index. He suggested a rate increase is likely as we transition into the fall shipping season. Here’s why:
“The headline number of 4% for GDP growth in the second quarter is getting plenty of news but the real number for getting a sense of true demand in this economy is the Final Sales component of GDP. It stood at 2.3% in Q2, well above the -1% seen in Q1 but noticeably below the 3.5% it averaged during the second half of 2013.
“Truck freight continues to show steady increases and the capacity situation is unlikely to loosen up any time soon. These good developments are partially offset by slower than expected growth in contract rates. Spot market rates are still elevated, although they have shown normal moderation during the summer months. We expect to see both spot and contract rates continue to rise as we get into the fall shipping season.”
James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at firstname.lastname@example.org or follow him on Twitter at @JamesMenzies. All posts by James Menzies