BLOOMINGTON, Ind. – The trucking industry appears to be in pretty good health overall, according to research firm FTR Transportation Intelligence’s most recent Trucking Conditions Index (TCI).
The TCI, produced monthly, tracks the changes among six major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fleet bankruptcies, fuel price and financing. The individual metrics are combined into a single index that tracks the market conditions that influence fleet behavior. A positive score represents good, optimistic conditions, while a negative score represents bad, pessimistic conditions.
“The index tells you the industry’s health at a glance,” explains an FTR press release, which compares the index number to taking a temperature. If a person has a fever, it’s a sign of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a TCI score well below zero is a warning of problems, while readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment, and double-digit readings either up or down are warning signs for significant operating changes.
The most recent reading, for July, puts the TCI in a positive range with a reading of 5.75. reflecting tightening capacity, rising spot rates and a further impact this fall and winter from the implementation of electronic logging devices (ELDs).
Jonathan Starks, Chief Operating Officer at FTR, commented: “The combination of multiple hurricanes, strengthening spot market conditions, and the final push towards ELD implementation means trucking is ready to shift into a higher gear. Fleets are finally starting to talk positively about market conditions after being stuck in a relatively sluggish environment for more than a year. Spot rates were up double-digits versus last year before the hurricanes hit and have surged further since then. When you add in a slightly more robust economy, capacity reductions due to Hurricanes Harvey and Irma, extra freight for storm recovery, and productivity reductions as ELDs are fully implemented; that’s a market which gives fleets a reason to be optimistic as we head towards 2018.”
Details of the July TCI are found in the September issue of FTR’s Trucking Update, published September 1. Also in the September issue, the “Notes by the Dashboard Light” section focuses on the relationship between strong market conditions and driver shortages.
The article explains that the TCI measure has not risen higher because it’s driven in large part by contract market conditions and it’s the spot market segment that is currently being pushed higher. Spot market data continues to support FTR’s near 100 percent active utilization index. Contract prices are expected to increase in 2018 as capacity further tightens, and as that happens the TCI will move up, as well.
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