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FTR’s Trucking Conditions Index Slips 2 Points, Conditions Still Positive

June 5, 2014

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The monthly Trucking Conditions Index, published by FTR Associates, fell more than two points in April to a reading of 5.91. The current reading is below the recent trend line for this index but reflects the short term fluctuations inherent in the overall measurement of trucking conditions.

The environment for carriers remains very positive, FTR stressed, with rising prices and tight TL hauling capacity.

“Just as the truck environment continues to get back to normal, the revisions to the GDP data for Q1 gives everyone a moment of pause," notes Jonathan Starks, FTR’s Director of Transportation Analysis. "How could we have had such a strong trucking market when the economy was apparently in decline? Part of the answer lies in the fact that goods movement was abnormal during this winter, and it likely led to a reduction in final inventories at many places. This was one of the biggest weak spots in first quarter GDP. So far, there is no indication that this has continued into the second quarter."

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FTR expects truck utilization to remain above 98% indefinitely with good freight demand, limited capacity, and sustained regulatory drag affecting the sector. These conditions continue to push pricing higher with an expected growth of 5% or greater during 2014.

Spot rates have leveled off but are still well above levels seen last year at this time," says Starks. "Contract rates, on the other hand, move up and down much slower as new contracts get slowly implemented over time. Trucking looks to be on very solid footing and should continue to show growth throughout 2014.”

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