FTR’s Trucking Conditions Index for June, as reported in the August 2012 Trucking Update, continued its downward trend, declining a half point from May to a reading of 4.5. This was weaker than initial expectations.
The current economy continues to increase modestly, supporting 3% tonnage growth. However, this is not enough to sustain a stronger pricing position for carriers during the summer shipping season, according to FTR analysts. The Trucking Conditions Index is a compilation of factors affecting trucking companies. Any reading above zero indicates a positive environment for truckers with readings above 10 a sign that volumes, prices and margin are in a solidly favorable range for trucking companies.
Jonathan Starks, director of transportation analysis for FTR, says: “We expect the index to further weaken slightly during the summer months but to remain in positive territory. Improvement will resume as we head into the fall peak as traffic builds and the delayed introduction of new federal regulations begin to restrict capacity. This trend will continue into 2013, culminating with the introduction of new hours of service rules by the FMCSA (Federal Motor Carrier Safety Administration) in July of next year. Given our expectations of a rising driver shortage, combined with a tailwind versus year-ago fuel prices and continued modest freight growth, the index should steadily increase into 2013.”