FTR Trucking Conditions Index gets big boost in July

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dockThe Trucking Conditions Index jumped 30 percent in July from June, reflecting an anticipation of higher rates due to tightening capacity, says FTR Associates, who produces the monthly index.

The combination of effects of regulations on trucking and “decent freight demand,” says FTR, will tightening capacity this fall. FTR also says it anticipates a peak in freight growth this fall before falling again to the slow growth seen in 2012 and 2013 so far.

The index’s reading in July was 8.41. Anything above 0, says FTR, indicates ” a generally positive environment for truckers.” A reading above 10 shows volumes, prices and margins in “a solidly favorable range for trucking companies,” says FTR.

Jonathan Starks, director of transportation analysis for FTR, added this analysis:

“There still remains very little hard evidence of the impacts from the recent introduction of new hours-of-service rules on July 1, but anecdotal accounts and very early data are starting to show some potential impacts. Unfortunately, freight demand has remained lackluster with very little movement up or down outside of normal seasonal activity. There is potential for a decent fall peak shipping season as the ISM manufacturing index is strong and inventories remain relatively lean, but the continued slog of the overall economy makes it unlikely that we get the significant push in consumer activity that is needed to really start moving the needle on capacity constraints and upward rate activity. Should any decent economic growth occur it should quickly show up in truck activity and tighten a market that has very little spare capacity. The potential for an extremely tight truck market remains but is dependent on those external factors.”