FTR’s Trucking Conditions Index (TCI) for December declined from November to a reading of 2.9 reflecting soft conditions that have plagued the industry, especially in the second half of 2016. The January index will likely hit a nadir ahead of a hoped-for bounce in 2017. FTR is confident that trucking conditions are nearing an inflection point toward the positive, with a steady increase in capacity utilization that will tighten prices moving further into the new year.
Jonathan Starks, Chief Operating Officer at FTR, comments, “The U.S. economy remains on stable footing, but there are several risks that are creating uncertainty in the transportation sector. First on everyone’s mind is the potential for significant change with the new White House administration. The most anticipated issue for transport companies is trade, specifically among our NAFTA partners. There is potential for some very significant changes coming from tariffs and taxes. After working on creating a North American supply chain over the last 25 years, anything that significantly restricts trade flows between two of our biggest trading partners will create stress throughout the supply chain.
“The other key issue relates to the coming implementation of Electronic Logging Devices (ELDs). There is a chance that the administration or courts could severely curtail, or remove, this regulation, but the long-standing bi-partisan support for transportation safety regulations convinces us that this is an unlikely scenario. FTR will be keeping a close eye on how small carriers begin to implement this into their operations over the next 9-12 months, and how it is likely to affect changes in carrier capacity and rates.”