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FTR: Truck utilization in range where capacity constraints put pressure on rates

FTR officials said that the highly visible dry van sector has been relatively stagnant for most of 2013. (The Trucker: APRILLE HANSON)

The Trucker News Services

12/10/2013

BLOOMINGTON, Ind. — FTR’s Trucking Conditions Index (TCI) reading of 9.18 in October, while down marginally from the previous month, remains high because of capacity tightness from regulatory drag, specifically the new Hours of Service rule, FTR officials said Tuesday.

Truck utilization is in the range where increasing capacity constraints put upward pressure on rates, according to Jonathan Starks, FTR director of transportation analysis.

Slowing regulatory momentum would ease this situation, but, if increased economic growth is realized in 2014, it will further increase shipping rates and add to a positive trucking bottom line, Starks said.

The details of the October TCI Index are found in the December issue of the Trucking Update published Nov. 26. Notes by the Dashboard Light commentary discusses the possibility of acceleration in economic growth next year which would impact trucking if it materializes.

"While the total truck industry is showing solid freight growth, the highly visible dry van sector has been relatively stagnant for most of 2013,” Starks said. “However, as cost increases continue to move higher, especially following the implementation of new HOS regulations this summer, we look for rates to follow suit. They began moving up during Q3 but not sufficiently enough to make up for the increased costs, and carriers’ margins deteriorated. The increased public rhetoric from fleet executives about this issue is setting up the scene for continued rate movement into 2014."

The Trucking Update, published monthly, is part of FTR's Freight Focus Series and reports data that directly impacts the activity and profitability of truck fleets. As part of the Trucking Update, FTR forecasts expected trends in this data and the probable short and long term consequences.

For more information on how to subscribe to the Trucking Update or other publications within the Freight Focus Series, send an email to sales@ftrintel.com  or call (888) 988-1699 ext. 1.

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