FTR's Trucking Conditions Index, as reported in the May Trucking Update, rose to 13.30 in March from a February reading of 9.92. A key driver for the improvement in the TCI was the ability of carriers to garner higher rates as industry capacity tightened. The Trucking Conditions Index is a compilation of factors affecting trucking companies and has been rising steadily since October 2010. 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.
FTR President Eric Starks said, "During the first months of 2011, the fundamentals of the balance between the supply and demand for truck transport was obscured by the normal seasonal weakness in demand. Now that we are moving into the higher freight months the dimensions of the capacity situation are beginning to come into sharper focus as we expected. Demand for truck transport is growing at a normal rate for this point in the economic recovery. Due to the continuing strength in the manufacturing sector we expect demand to hold up despite the temporary weakening of GDP growth. We believe that these fundamentals will enable trucking revenues to outpace the significant increases in trucking costs, including higher driver wages, fuel prices and more expensive equipment."
The Trucking Update, published monthly, is part of FTR's Freight Focus Series and 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.
Source: FTR Associates
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