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Trucking Conditions Index Shows Slow Growth in Freight

March 15, 2016

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Source: FTR
Source: FTR

The Trucking Conditions Index measure fell to a reading of 9.05 for January, indicating slowing growth patterns for truck freight, according to FTR.

The index fell from a recent high of 10.88 in December, showing that current freight demand can be easily handled by current carrier capacity. Growth in the long-haul dry van segment has slowed significantly in the last year, causing spot rates to drop and capacity to loosen, according to FTR.

“The data that has come out of the spot market for the last year highlights those results with capacity much looser and rates down,” said Jonathan Starks, chief operating officer of FTR. “However, the contract market has held up relatively well during that same stretch of time.”

As the current economic recovery is extended, market conditions are slowly slipping and becoming more volatile. FTR expects 2016 not to be a strong year for truck operators with a less than ideal negotiating environment for truckers heading into the usual spring freight increase.

However, a looming crisis caused by regulations such as for ELDs and speed limiters could tighten capacity and potentially reverse the current situation by next year.

“The situation could begin to reverse as carriers implement ELDs and speed limiters ahead of the mandatory dates set for late 2017 and early 2018,” said Starks. “Even if the economy sours between now and then, the impact of those regulations could be enough to keep capacity relatively tight and rates neutral.”

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