BLOOMINGTON, IN -U.S. truck freight improved dramatically in December 2014 due to strong freight and high contract rates, according to freight transportation forecasting firm FTR.
FTR’s Trucking Conditions Index for December rose 30 percent from November to a reading of 11.80, its highest level seen last year.
FTR said it expects a modest relaxation of capacity constraints in 2015, along with a bounce back in diesel prices, to keep the index in an eight-point to nine-point range through the year.
“Fleets were hitting their stride to finish the year, led by a dramatic drop in diesel prices and continued strength in contract pricing,” said Jonathan Starks, FTR’s director of transportation analysis. “However, there are several indicators that lead us to exercise caution as 2015 plays out.”
1. Diesel prices: They are expected to rise later in the year. Starks said FTR’s outlook assumes modest increases, but the energy markets don’t always work that way.
2. Capacity: “Truck ordering activity at the major builders hit 375,000 units in 2014, well above the 295,000 units that they actually produced. Those units will spill over into 2015 as carriers add or replace the trucks in their fleets,” Starks said.
3. Markets: According to Starks, spot market data shows that the market has returned to normal this year following a very capacity-constrained winter and spring in 2014. “That will make year-over-year comparisons look much worse until late in the year. Despite these worries, the market is still running pretty tight and economic growth is anticipated to stay at a solid pace.”
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