BLOOMINGTON, Ind. — Transportation analyst firm FTR’s Trucking Conditions Index (TCI) for July increased to 5.99, the company reported today. The July reading reflects “improved market prospects due to moderate economic growth and a regulatory agenda that will tighten capacity utilization,” FTR added. “Building regulatory drag over the next eighteen months should increase pricing and margins for fleets that have capacity. TCI readings for the balance of this year and into early 2017 should remain near the current level.”
“The freight market is doing slightly better than just treading water, but there is still a disconnect between activity in the spot and contract markets,” said Jonathan Starks, chief operating officer at FTR. “This is a result of the slow growth environment that we are in right now. You use your contract carriers whenever you can. There just hasn’t been enough extra freight to spill over into the spot markets.”
Negotiating pressure from shippers on carriers due to steep drops in spot rates may be lessening soon, Starks said, with the possible exception of the flatbed market.
“I believe that those conditions will soon be turning, especially for van freight,” he said. “Van loads on the load boards are up this summer, and capacity has noticeably tightened. It isn’t extremely tight, but compared to last year it is a welcome relief for carriers. That should soon take root in contract rates, especially as shippers and carriers prepare for their 2017 negotiations. One note of caution is in the flatbed segment. The big reductions in oilfield activity has continued to put too much carrier capacity back into the spot market, and pricing is still weak for this segment. Until oil prices move higher or housing and business investment rally, the long-haul flatbed market is going to continue to struggle for volumes and rates.”
Details of the July TCI are found in the September issue of FTR’s Trucking Update, published August 30, the company reported.
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