Freight hauling capacity expected to continue to tighten, analyst says

Trucking capacity tightened in July as FTR’s Trucking Conditions Index remained positive with a reading of 5.75, according to a Sept. 22 report from transportation analyst FTR. The reading also reflects rising spot rates and the impact from the implementation of the electronic logging devices (ELD) mandate this winter.

The index has not risen higher because it’s driven by contract market conditions, according to FTR. “Spot market data continues to support FTR’s near 100% active utilization index. Contract prices are expected to increase in 2018 as capacity further tightens which will move the Trucking Conditions Index up through the year.”

Jonathan Starks, chief operating officer at FTR, said “the combination of multiple hurricanes, strengthening spot market conditions and the final push toward ELD implementation means trucking is ready to shift into a higher gear. Fleets are finally starting to talk positively about market conditions after being stuck in a relatively sluggish environment for more than a year.”

Before the hurricanes hit, spot rates had risen in the “double-digits,” from the same period in 2016, and rates have continued to rise since the hurricanes, he said. “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 toward 2018.”