Supply-demand dynamics continue to favor truckers, FTR says

Click to enlarge (Source: FTRIntel.com)Click to enlarge (Source: FTRIntel.com)

FTR’s Trucking Conditions Index increased to a reading of 9.10 for August, continuing an upward trend that reflects an uneasily tight capacity situation.

As market tightness continues, rate and service spreads are increasing between “good” and “bad” freight, the report explains. Carriers are experiencing demand levels for their services that are allowing them to choose what freight to haul while maintaining dependable workloads and increasing margins.

The TCI should remain at very positive levels for the foreseeable future with a strengthening economy suggesting upside potential for freight. 

“With overall capacity remaining tight and continued cost pressures at fleets we can expect to see freight rates moving higher into 2015. Spot rates are edging lower – from a very high level – but contract rates are still showing signs of acceleration,” says Jonathan Starks, FTR’s director of transportation analysis. “Growth in the use of outsourced capacity, i.e. broker and spot markets, is joining wage increases as a main driver of cost increases. Fleets are using more outsourced capacity, a segment in which regulatory impacts are especially strong.”

Details of the August TCI Index are found in the October issue of FTR’s Trucking Update. Along with the TCI and market commentary, the Trucking Update includes data and analysis on load volumes, the capacity environment, rates, costs and the truck driver situation.