While still strong, conditions may be moderating for the trucking industry as key indicators are slowly retreating from recent highs.
Spot rates tracked by DAT slipped for the third straight week, with dry van, refrigerated and flatbed rates all falling 1 cent for Aug. 13-19. The national dry van average dropped to $1.78 per mile, refrigerated fell to $2.07 and flatbed to $2.18.
Still, DAT notes that the rates remain strong and are still up year over year.
Another indicator, FTR’s Trucking Conditions Index (TCI), retreated in June, dropping two points month-over-month to a reading of 4.54.
“The lower June reading is, in part, a reflection of the increased costs for labor, fuel, and purchased transport for some,” FTR said. “Market tightness is now seen as likely shorter than expected with some resistance to new regulations that could have put an increased drag on capacity.”
FTR maintains a favorable freight forecast for 2017 “but does not expect as strong a performance in 2018, showing perhaps half the growth and with an increasing risk of recession by the end of the year,” it said.
“Despite the monthly drop from May to June, the TCI has stayed in a relatively stable range since this time last year,” explained Jonathan Starks, COO. “It remains positive, but does not yet indicate that a significant change in operations is occurring. The potential for such a change increases as we move through 2018, with ELD implementation and continued freight growth hindering truck capacity. We are also beginning to hear stories of increased difficulty in hiring as the economy begins approaching full employment.”
Did you know?
The top three out-of-service violations in this year’s Roadcheck inspection blitz, held June 6-8, were brake systems (26.9%), cargo securement (15.7%) and tires/wheels (15.1%).
“The recent strong increases in spot market rates bears a close watch, as it is an early indicator as to how rates in the much bigger contract arena are likely to move. Spot data in early August shows that the rate increases have hit the double-digit mark and are still moving up. Market participants need to continue evaluating conditions ahead of the ELD implementation in December to make sure that they are prepared for the possible disruptions that could occur.”
– Jonathan Starks, COO, FTR
In other news:
FTC clears Amazon’s Whole Foods deal
The Federal Trade Commission has given its approval for Amazon’s $13.4 billion acquisition of Whole Foods. (Wall Street Journal)
New home sales fall
New home sales fell in July fell 9.4% as a shortage of housing inventory is affecting the market, according to the Commerce Department. (Wall Street Journal)
States exploring truck platooning
More states are exploring truck platooning technologies and looking at ways to adjust regulations to accommodate them. (Transport Topics)
Manufacturing starts to slow
The Flash U.S. Manufacturing Purchasing Managers’ Index shows that manufacturing remains positive, but it may be slowing according to the latest data. (Heavy Duty Trucking)
Paccar debuts 12-speed transmission
Paccar has introduced a new 12-speed transmission as part of its new integrated powertrain package. (CCJ)
The amount of data available today can be overwhelming, especially when it comes to forecasting the economy. For every piece of data showing how well the economy is doing, there is another one showing concern going forward. If you’re a fleet executive trying to manage operations, it’s almost too much data at times.
Hammer down everyone!