Trucking Conditions to Improve, But Keep an Eye on Economy

NASHVILLE, IN — FTR’s Trucking Conditions Index (TCI) for August, rose 1.4 points from July to a reading of 5.8.

Ever since the economy weakened in early 2011, the index has been in mildly positive territory, but without clear direction, FTR said.

FTR, however, does expect trucking conditions to improve in 2013, namely because of better economics and a strong increase in capacity utilization from the added constraints that Federal regulations are expected to have on the industry come mid-year 2013.

“Setting aside the inherent economic risks at the moment, we expect the rate environment to improve for fleets as capacity tightens in 2013 when more stringent Hours-of-Service rules go into effect,” said Jonathan Starks, director of Transportation Analysis for FTR. “This will also have the effect of worsening the driver shortage, moving the situation from the currently “tight-but-manageable” level towards a more acute shortage, similar to that experienced back in 2004, when the last major rule change went into effect.”

Still, though, keep an eye on the economic environment, Starks advised. “A major downshift in growth would have major negative implications on margins just as the new tranche of HOS regulations go into effect.”

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