FTR's Trucking Conditions Index improves in July

FTR’s Trucking Conditions Index (TCI) for July received a bounce to a reading of 5.99, reflecting improved market prospects due to moderate economic growth and a regulatory agenda that will tighten capacity utilization. Building regulatory drag over the next eighteen months should increase pricing and margins for fleets that have capacity. TCI readings for the balance of this year and into early 2017 should remain near the current level, according to FTR.

“The freight market is doing slightly better than just treading water, but there is still a disconnect between activity in the spot and contract markets,” said Jonathan Starks, FTR’s chief operating officer. “This is a result of the slow growth environment that we are in right now. You use your contract carriers whenever you can. There just hasn’t been enough extra freight to spill over into the spot markets. Plus, shippers were able to use the big drops in spot rates to help put pressure on on their contract carriers. I believe that those conditions will soon be turning, especially for van freight.

“One note of caution is in the flatbed segment,” Starks added. “The big reductions in oilfield activity has continued to put too much carrier capacity back into the spot market, and pricing is still weak for this segment. Until oil prices move higher or housing and business investment rally, the long-haul flatbed market is going to continue to struggle for volumes and rates.”