FTR’s Trucking Conditions Index (TCI) increased to a reading of 9.10 for August, continuing an upward trend that reflects an uneasily tight capacity situation. As market tightness continues, rate and service spreads are increasing between “good” and “bad” freight. Carriers are experiencing demand levels for their services that are allowing them to choose what freight to haul while maintaining dependable workloads and increasing margins. The TCI should remain at very positive levels for the foreseeable future with a strengthening economy suggesting upside potential for freight.
Jonathan Starks, FTR’s Director of Transportation Analysis, comments, “With overall capacity remaining tight and continued cost pressures at fleets we can expect to see freight rates moving higher into 2015. Spot rates are edging lower—from a very high level—but contract rates are still showing signs of acceleration. Growth in the use of outsourced capacity (i.e. broker and spot markets) is joining wage increases as a main driver of cost increases. Fleets are using more outsourced capacity, a segment in which regulatory impacts are especially strong.”