Volumes growing, rates stagnant: FTR

John G Smith

BLOOMINGTON, IN – Analysts at FTR are predicting U.S. freight volumes will grow this year, but say rates will likely be stagnant for at least six months.

“The economic outlook has solidified for 2017, and freight growth is expected to accelerate versus what we saw in 2015 and 2016,” says Jonathan Starks, Chief Operating Officer. “While we have reduced our assumptions of productivity hits to truck fleets and drivers from the regulatory environment, the acceleration of freight growth is enough to keep utilization rates high, and climbing, during 2017.”

“The downside is that the rate environment remains slow to pick up,” he adds. “Contract rates will begin to show year-over-year gains by the time Q2 hits, but any real acceleration isn’t likely to occur until the end of the year. Spot rates have begun moving upward, but are only a couple of percentage points above prior year levels.”

The rollout of new regulations, specifically as they relate to Electronic Logging Devices (ELD), will determine exactly where rates go, he says.

 “If ELD implementation is slowed or enforcement remains lax, then the impacts on utilization will be muted and the market will be slower to react to the changes. This scenario would limit how much the rate environment could go up.”

Fleets that work in the U.S. must have Electronic Logging Devices in place by December.

John G Smith

John G. Smith is the editorial director of Newcom Media's trucking and supply chain publications -- including Today's Trucking, trucknews.com, TruckTech, Transport Routier, Inside Logistics, Solid Waste & Recycling, and Road Today. The award-winning journalist has covered the trucking industry since 1995.

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