Trucking Conditions Index reveals market tilted heavily in carriers’ favor: Economic conditions for trucking companies, as measured by FTR’s monthly Trucking Conditions Index, spiked in October, FTR reported this week. What’s more, the conditions driving the positive momentum for carriers should continue into 2018, says FTR Chief Operating Officer Jonathan Starks, who says carriers “should be prepared for big changes — and big opportunities.”
FTR attributes the positive market conditions to a strengthening economy, combined with the capacity pressures brought on by hurricanes Harvey and Irma and tightening capacity spurred by more widespread adoption of electronic logging devices. These conditions have tightened trucking industry capacity and driven up rates on the spot market and the contract market, swinging conditions strongly in carriers’ favor.
These factors should hold into 2018, “equating to solid conditions for carriers,” says FTR.
“The TCI is nearing a double-digit number, which indicates that there are big opportunities for carriers with regard to both rates and the loads they choose to carry,” says FTR Chief Operating Officer Jonathan Starks. “Of course, there are still quite a few ifs in the near future. If the economy can continue to grow at around a 3 percent rate, we will see freight demand maxing out any excess capacity. If the ELD implementation and enforcement stay on track, the spring will bring capacity utilization over 100 percent and the freight transportation market will be scrambling to align loads and trucks. If severe winter weather comes into play, transportation managers will be facing their toughest year since 2004.”
Spot market momentum remains: The availability of truckload freight on the spot market in November was up 39 percent from the same month last year, according to DAT’s monthly Freight Index, with the firm noting “shippers clamored for trucks to move retail freight ahead of the holidays.”
Overall, load volume dipped 13 percent from October, which is a typical seasonal decline, DAT notes. Rates, however, continued to gain, particularly for van and reefer haulers.
“Demand for spot truckload services has been at an all-time high since August, and November continues that trend again, despite seasonal declines,” said Mark Montague, DAT industry analyst. “Increased freight activity, higher fuel prices, and uncertainty surrounding the electronic logging device (ELD) mandate all contribute to this pressure on rates, which are expected to remain elevated through the end of the year and beyond.”
Trucking industry employment climbs for fourth month straight: Total employment in the for-hire trucking industry grew by 1,800 jobs in November, according to the Department of Labor’s monthly Employment Situation Report. November’s uptick marks the fourth consecutive month that industry employment gained.
Though the DOL preliminarily reported a 100-job decline in October, it revised those figures to a 900-job gain. It also upwardly revised September’s trucking industry employment, now reporting a 3,200-job gain.
The economy as a whole in November added 228,000 jobs, and the country’s unemployment rate held at a low 4.1 percent.
Total employment in the for-hire trucking industry totaled 1.4775 million in November, up 15,300 jobs from the same month last year. Those figures do not account for private fleet data and is based on the number of payroll employees in the month.
The construction industry in November added 24,000 jobs, and the manufacturing sector grew by 31,000 jobs. The transportation and warehousing sector, under which trucking falls, added 10,500 jobs in November.