Trucking conditions continue to improve: FTR

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NASHVILLE, Ind. — Trucking conditions in the US continue to improve, according to the most recent FTR Trucking Conditions Index.

The index, a compilation of factors that affect trucking companies, rose to 9.1 in January, up from a December reading of 7.1

The index has been steadily rising since October, 2010, industry forecaster FTR reports. Any reading above zero indicates a healthy trucking environment. FTR predicts the index will continue its upward trend until mid-2012.

“Good freight demand and tightening capacity are allowing truckers to push freight rates higher,” said Eric Starks, president of FTR. “We expect to see significant movement as we leave the winter freight lull behind in March. Our expectations for improving freight conditions are increasing, but at the same time we are moderating our near-term assessment for regulatory drag, as we now believe that more of this will be concentrated late in the year and into 2012.”

Still, Starks warns of challenges in the months ahead.

“Significant cost increases are on the horizon, including higher equipment and labour costs,” he warned. “These increases would negatively affect the Trucking Conditions Index, but we feel that they will be outpaced by the improving rate environment. A major wild card is fuel prices. The recent sharp run-up in fuel costs due to Mideast unrest (not yet reflected in the TCI), if sustained, will put a great deal of pressure on marginal carriers. The time lag between the increase in the cost of diesel and their ability to recover the cash via fuel surcharges will put stress on already-shaky balance sheets. The net result might be a further tightening in capacity as marginal carriers succumb, provided that the oil price run-up is not so severe as to adversely affect the recovery itself.”

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