FTR’s Trucking Conditions Index for February Moves Up in Expectation of Tightened Market
FTR’s Trucking Conditions Index for February took a positive step, as the company's analysts expect the index to approach a double digit positive reading by the end of the year due to the combination of freight growth and still-planned regulatory headwinds in 2017.
by Staff
April 10, 2017
2 min to read
FTR’s Trucking Conditions Index for February took a positive step, moving up about two and half points from January to a reading of 5.11. The company's analysts expect the index to approach a double digit positive reading by the end of the year due to the combination of freight growth and still-planned regulatory headwinds in 2017.
The TCI tracks the changes representing six major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fleet bankruptcies, fuel price, and financing.
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FTR is forecasting improvement in freight growth in 2017, closing in on 4% loadings growth for the year. The Trump administration's focus on reducing regulations has prompted FTR analysts to modestly downgrade its regulatory forecast for 2017, but they still expect significant effects late in the year from the electronic logging device mandate that goes into effect in December. On the downside, FTR does not expect contract rates to make a strong move for at least six months.
“The economic outlook has solidified for 2017, and freight growth is expected to accelerate versus what we saw in 2015 and 2016," explained Jonathan Starks, FTR chief operating officer. "While we have reduced our assumptions of productivity hits to truck fleets and drivers from the regulatory environment, the acceleration of freight growth is enough to keep utilization rates high, and climbing, during 2017.
"The downside is that the rate environment remains slow to pick up. Contract rates will begin to show year-over-year gains by the time Q2 hits, but any real acceleration isn’t likely to occur until the end of the year. Spot rates have begun moving upward, but are only a couple of percentage points above prior year levels."
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Starks noted that if ELD implementation is slowed or enforcement remains lax, it would limit how much rates might rise.
Details of the February TCI are found in the April issue of FTR’s Trucking Update, published March 30.
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