FTR Trucking Conditions Index Moves Higher in August

October 04, 2012

FTR expects trucking conditions to improve in 2013, thanks to modestly better economics and a strong increase in capacity utilization stemming from added constraints on trucking from federal regulations taking effect in mid-year.

If the economy keeps up its slow but steady improvement, FTR predicts a better 2013.(Photo courtesy Con-way)

The transportation analysis and forecasting firm says its Trucking Conditions Index for August rose 1.4 points from July to a reading of 5.8. The index has been in mildly positive territory, but without clear direction, since the economy weakened in early 2011.

Any reading above zero indicates a positive environment for truckers. Readings above 10 signal that volumes, prices, and margins are in a solidly favorable range for trucking companies.

"Setting aside the inherent economic risks at the moment, we expect the rate environment to improve for fleets as capacity tightens in 2013 when more stringent hours-of-service rules go into effect," says Jonathan Starks, director of transportation analysis.

This will also have the effect of worsening the driver shortage, moving the situation from the currently tight-but-manageable level towards a more acute shortage, similar to that experienced back in 2004, when the last major rule change went into effect.

Truck fleets will also need to keep a keen eye on the economic environment heading into 2013, because a major downshift in growth would have major negative implications on margins just as new hours of service regulations go into effect.