FTR’s Trucking Conditions Index (TCI) rose 1.4 points in August, the research firm announced.
As reported in the company’s October 2012 Trucking Update, stood at 5.8 for the month, up from July’s reading of 4.4.
The index has been in mildly positive territory, but without clear direction, since the economy weakened in early 2011. FTR expects trucking conditions to improve in 2013 because of modestly better economics and a strong increase in capacity utilization stemming from added constraints on trucking from Federal regulations taking effect in mid-year 2013.
The Trucking Conditions Index is a compilation of factors affecting trucking companies. Any reading above zero indicates a positive environment for truckers. Readings above 10 signal that volumes, prices, and margins are in a solidly favorable range for trucking companies.
“Setting aside the inherent economic risks at the moment, we expect the rate environment to improve for fleets as capacity tightens in 2013 when more stringent Hours-of-Service rules go into effect,” says Jonathan Starks, Director of Transportation Analysis for FTR. “This will also have the effect of worsening the driver shortage, moving the situation from the currently “tight-but-manageable” level towards a more acute shortage, similar to that experienced back in 2004, when the last major rule change went into effect.
“Importantly, truck fleets will also need to keep a keen eye on the economic environment heading into 2013 because a major downshift in growth would have major negative implications on margins just as the new tranche of HOS regulations go into effect.”
The Trucking Update is published monthly as part of FTR’s Freight Focus Series. It reports data that directly impacts the activity and profitability of truck fleets. As part of the Trucking Update, FTR forecasts expected trends in this data and the probable short and long term consequences. October’s Notes by the Dashboard Light commentary discusses two Washington agendas, the national debt and regulations that have implications for trucking. For more information on how to subscribe to the Trucking Update or other publications within the Freight Focus Series, send an email to [email protected] or call Clay Davis at 1-888-988-1699, Ext. 1.