The FTR Trucking Conditions Index for October, jumped to a reading of 9.48, way up from the previous month's level of 3.5.
A strong economy, pressure from hurricane recovery, and the upcoming ELD mandate have all created a tight market resulting in improved contract rates, according to FTR. While the TCI has hit a very high level, FTR believes there is potential for further upside during the first half of 2018.
“The TCI is nearing a double-digit number, which indicates that there are big opportunities for carriers with regard to both rates and the loads they choose to carry. Of course, there are still quite a few ‘ifs’ in the near future,” said Jonathan Starks, COO of FTR. “If the economy can continue to grow at around a 3% rate in Q4 and 2018Q1, we will see freight demand maxing out any excess capacity.”
Any gains seen early next year will likely be followed by softening in industry conditions in the second half of 2018 due to slower freight growth, but it should still maintain solid conditions for carriers.
“If the ELD implementation and enforcement stay on track, the spring will bring capacity utilization over 100% and the freight transportation market will be scrambling to align loads and trucks,” said Starks. “If severe winter weather comes into play, transportation managers will be facing their toughest year since 2004. Carriers should be prepared for big changes, and big opportunities.”