FTR’s Trucking Conditions Index, as reported in the December Trucking Update, declined to a reading of 3.4 in October 2011.
The environment for truckers as measured by the TCI softened primarily due to further delay in the issuance of revised hours of service regulations. This is affecting the near-term outlook for capacity and therefore the current ability of carriers to gain rate increases. The TCI is projected to increase as capacity conditions tighten, but the peak has been moved back from April to October 2012, reflecting the regulatory delay.
A compilation of factors affecting trucking companies, the Trucking Conditions Index has remained in positive territory for the past eight months. Any reading above zero indicates an adequate trucking environment with readings above 10 a sign that volumes, prices, and margin are in a good range for trucking companies.
Larry Gross, senior consultant for FTR, said, “There was a considerable drop of six points in the TCI in October. Some of this drop was a result of changes in our methodology for calculating the TCI as we continue to refine this measurement. Although October’s TCI reflected the rather subdued nature of the fall peak at that point in time, the recent strong start to the holiday shopping season combined with retailers’ lean inventories cause us to believe that the TCI will soon resume climbing even in the absence of near-term changes in federal regulations. The addition of any such changes, now expected to be announced by year-end, will exacerbate the trend.”
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