The FTR Trucking Conditions index declined in December, reflecting soft conditions that affected the industry in the second half of 2016. However, FTR is projecting a rebound in trucking conditions in 2017 as the result of a steady increase in capacity utilization that will tighten prices in the new year.
The TCI fell to a reading of 2.9, down from 4.5 in November and 10.88 in December 2015.
Despite the nearing positive turn, FTR expects the TCI to slide even further in January before it begins to register an uptick.
“The U.S. economy remains on stable footing, but there are several risks that are creating uncertainty in the transportation sector,” said Jonathan Starks, FTR chief operating officer. “First on everyone’s mind is the potential for significant change with the new White House administration.”
Expounding on his remarks, Starks stated that trade, specifically among NAFTA members, was the most anticipated issue for transportation companies.
“There is potential for some very significant changes coming from tariffs and taxes,” said Starks. “After working on creating a North American supply chain over the last 25 years, anything that significantly restricts trade flows between two of our biggest trading partners will create stress throughout the supply chain.”
Another key upcoming issue is the mandating of electronic logging devices later this year and the chance that the Trump administration could curtail or even remove the regulation. But that remains highly unlikely as transportation safety regulations have a history of bi-partisan support. With that in mind, FTR said it plans to monitor how small carriers implement ELDs into their operations over the next 9 to 12 months and how that could affect changes in capacity and rates.