Today’s Pickup: Tight capacity, rising rates continue to push Trucking Conditions Index higher

Month-by-month look at FTR's TCI

Month-by-month look at FTR's TCI

Good day,

Continued tightening of capacity is driving up FTR’s Trucking Conditions Index (TCI). The TCI for July posted a positive reading of 5.75, reflecting tightening capacity, rising spot rates and a further impact this fall and winter from the implementation of electronic logging devices, FTR said.

FTR said the TCI has not risen higher because it is driven in large part by contract market conditions and it’s been the spot market segment that is rising. Spot market data continues to support FTR’s near 100% active utilization index, it said. Contract prices are expected to increase in 2018 as capacity further tightens which will move the Trucking Conditions Index up through the year.

“The combination of multiple hurricanes, strengthening spot market conditions, and the final push towards ELD implementation means trucking is ready to shift into a higher gear,” explained Jonathan Starks, COO. “Fleets are finally starting to talk positively about market conditions after being stuck in a relatively sluggish environment for more than a year. Spot rates were up double-digits versus last year before the hurricanes hit and have surged further since then. When you add in a slightly more robust economy, capacity reductions due to Hurricanes Harvey and Irma, extra freight for storm recovery, and productivity reductions as ELDs are fully implemented; that’s a market which gives fleets a reason to be optimistic as we head towards 2018.”
 
The Trucking Conditions Index tracks the changes representing six major conditions in the U.S. truck market. These conditions are: freight volumes, freight rates, fleet capacity, fleet bankruptcies, fuel price, and financing. A reading well below zero on the FTR Trucking Conditions Index warns of problems, while readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment, and double-digit readings (both up or down) are warning signs for significant operating changes.

Did you know?

The percentage of diesel-powered vehicles sold this year has increased over 2016, with over 94% of all vehicles purchased in 2017 powered by diesel.

Quotable:

“We have fixed prices. We don’t allow bidding. That’s significant, because from a driver perspective, it’s like going to Amazon. That’s what enables that one-minute book.”

- Bill Driegert, Uber Freight’s director of business development, speaking at the Intermodal Association of North America’s Intermodal Expo

In other news:

Uber Freight is banking on fixed pricing, no-bidding

The success of Uber Freight will depend on its ability to achieve fixed pricing for loads with no bidding or phone calls, said the company’s director of business development. (Transport Topics)

Assessing the new engine oils

New engine oils introduced in December are proving themselves in daily operation, but convincing buyers is still an ongoing process, says Shell. (Heavy Duty Trucking)

How old is too old?

For Bob Spooner, 56 years is still not enough. That is how old Spooner’s Peterbilt truck is, and it is still going strong. (TruckersNews)

Spot rates hit 2-year highs

Spot rates have hit a two-year high following the two hurricanes to hit the U.S., with dry vans climbing to $1.93 per mile, flatbed rates rising to $2.24 per mile and reefer up to $2.19. (DC Velocity)

FMCSA proposes lowering carrier registration fees

FMCSA is proposing a reduction in Unified Carrier Registration fees for at least the next two years because fees collected for 2016 exceeded the statutory maximum the agency could collect. (CCJ)

Final Thoughts

Uber Freight’s director of business development said the firm’s success depends on getting fixed pricing and using technology to eliminate phone calls and bid haggling. No surprise there, but will truckers – all of whom have different operating/financial needs – accept. As long as someone accepts the price, the model works, but how many truckers and small carriers will survive in an industry with already thin margins?   

Hammer down everyone!