Trucking news and briefs for Friday, Sept. 23, 2022:
Trucking Conditions improved in July but remained negative
FTR’s Trucking Conditions Index (TCI) improved in July to a reading of -0.7 from the previous -3.36, principally because of falling diesel prices, FTR said.
Although the index was just below the index’s base of zero, it was the third consecutive month of negative readings -- a situation that had not occurred since March-May 2020. FTR expects that trucking market conditions are in for a long period of moderate weakness.
“Trucking companies had a great run, but freight dynamics clearly have softened,” said Avery Vise, FTR’s vice president of trucking. “While the economy and freight markets look more resilient than many observers fear, risks are weighted to the downside. Market weakness will not be uniform, but the type of freight is hardly the only differentiator.”
Vise said carriers with more contract freight “should continue to fare significantly better than the total market,” and carriers that have managed costs well “certainly will be in a better position to prosper.”
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices and financing costs. The individual metrics are combined into a single index indicating the industry’s overall health. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.
ACT: Volumes flat, productivity down in August
Freight volume was flat while productivity was down in August, according to the latest release of ACT’s For-Hire Trucking Index. The index also showed the Supply-Demand Balance and capacity rising marginally.
The ACT For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. ACT Research converts responses into diffusion indexes, where the neutral or flat activity level is 50.
“While Volume Index flatness m/m reflects the difficult freight environment, August’s number remains above the June/Q2 dip and reflects diminished but wage-supported underlying economic conditions,” said Kenny Vieth, President & Senior Analyst at ACT Research.
Vieth added that fleet productivity/utilization was down 7 points from July, “as the lower volume freight market increases inefficiency. Downward pressure on freight volumes related to inflation and interest rates, recovering equipment production, and still-rising driver populations suggest that fleet utilization is likely to be choppy across coming quarters,” he said.
Regarding supply and demand, Vieth said even though volumes were up, “the reading still reflects a loose trucking market and a late stage in the freight cycle.”
He added that freight volumes “are not in significant downturn, but have certainly stagnated since Q1,” while capacity is still growing. “With capacity growth set to continue amid flattish industry volumes, the looser environment is likely to persist, even as volumes ramp into peak freight season in the coming months,” Vieth said.
TLSS acquires Freight Connections
Logistics service provider Transportation and Logistics Systems (TLSS) has acquired Ridgefield Park, New Jersey-based Freight Connections – a provider of transportation, warehousing, consolidating, distribution and local cartage services throughout the tri-state area – for more than $9 million.
Joseph Corbisiero will remain with the company as President and CEO of the new subsidiary.
TLSS, through its wholly-owned operating subsidiaries, Freight Connections, Inc, Cougar Express, Inc. and JFK Cartage, Inc., operates as a full-service logistics and transportation company from Jupiter, Florida.