Fleet Management

FTR: Conditions Point to Tightening Capacity

December 12, 2016

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Chart: FTR
Chart: FTR

FTR’s Trucking Conditions Index for October, while currently in low positive territory, remains on course to reflect improving conditions for carriers as capacity tightens from regulations being implemented.

Overall, said FTR, that tighter capacity will improve pricing and margins for trucking companies through next year. The forecasting firm added that the TCI is forecast to reach its peak in late 2017 or early 2018.

“Despite the pullback in the October TCI, there is sufficient evidence in the marketplace to indicate a turnaround is in the works for truckers,” said Jonathan Starks, FTR chief operating officer. “The spot market has shown a dramatic change with posted loads showing a 40% increase in November versus last year. Combine that with the recent reductions in truck capacity that have finally occurred, and you arrive at a market that is set to see year-over-year rate increases for the first time since the second quarter of 2015.”

While the recent election of Donald Trump creates some uncertainty, according to Starks, the biggest unknown is the impact of electronic loging devces on the marketplace in 2017. A delay in the regulations could mute that impact and affect pricing.

“However, the market is already showing a positive shift, and the negative pricing of the last two years is unlikely to last much longer,” added Starks.

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