FTR’s Trucking Conditions Index (TCI) for August, at a modest reading of 1.41, is not wholly reflective of the current environment for truckers. As reiterated in the October issue of the Trucking Update, the TCI primarily tracks the contract markets which have largely been unaffected by the current tightness influencing spot market rates. In addition, the major disruptions from Hurricanes Harvey and Irma had most of their impacts starting in September.
Jonathan Starks, Chief Operating Officer at FTR, comments, “The truck market is currently in the middle of a significant change in conditions. While the recent weather events made it feel like it happened all at once, spot markets have actually been moving in this direction for the past year. Load activity was rising, truck availability was falling, and rates were already up 20% year-over-year before the storms hit. Spot market rates are a leading indicator; and, although there is a lag, contract markets are starting to follow suit. Shippers are now taking notice and are getting worried about dealing with double-digit rate increases as we head towards bid season.”