Easing Rates, Capacity Lead to Weaker Trucking Biz

BLOOMINGTON, IN — A measure of trucking industry business conditions fell in April as capacity and pressure on rates eased up.

The Trucking Conditions Index (TCI) from the freight forecasting firm FTR shows a 9% decline from the previous month to a relatively modest reading of 6.7, but still higher than the same time last year.

A reading above zero indicates a positive business environment while one below zero is negative.

It also said lower fuel prices during April resulted in a positive effect on the index.

The future outlook shows an increasingly positive environment for trucking because of expectations of a tightening market as additional regulatory drag appears leading to a likely capacity crisis in 2017, according to FTR.

“While still at a reasonably strong level the TCI is indicating a moderating environment for carriers,” said Jonathan Starks, FTR’s director of transportation analysis. “Rate increases have pulled back over the last couple of months and, although still positive, will lessen year-over-year gains later in the year.”

He said economic indicators still show a slow growth environment for both the economy and for freight.

“Load board data from Truckstop.com continues to show a return to normal activity following last year’s tight conditions,” Starks said. “Shippers’ desires to secure capacity should keep contract rates growing, but both contract and spot rates are susceptible to big drops if the economy is unable to accelerate after the weak start to 2015.”

 

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