BLOOMINGTON, Ind. — FTR’s Trucking Conditions Index (TCI) for November fell back from October to a more sustainable level with a 5.8 reading.
Although there was a significant decline in the index, conditions remained strong for carriers in November, FTR reported. FTR assumed the spike in October would be short-lived and would likely not be maintained at that level.
Freight demand remains strong but, with utilization figures close to 100%, there is not much upside potential to this piece of the index.
“With utilization levels fairly close to industry limits, further gains in the TCI are likely to come from either more significant pricing gains or additional freight growth,” said Jonathan Starks, chief operating officer at FTR. “We are already seeing the pricing effects take hold with more substantial contract rate gains as spot market pricing surged after the hurricanes and during the holidays. Spot markets actually hit record high rates in the last week of 2017 and are starting 2018 at a significantly elevated level. As we move into 2018, the market is poised to see additional freight growth and further limits on capacity as ELDs are fully enforced beginning April 1. The next critical time frame is Q2 when truckload activity ramps up and the full ELD enforcement hits. As the recent Polar Vortex weather demonstrated, any modest change in operating conditions can have an oversized impact on carriers and shippers as the industry operates with very limited (if any) excess capacity.”