FTR’s Trucking Conditions Index (TCI) measure for June rose back up from May, jumping 56% to 7.66, hitting the highest level of 2015. Freight growth slowed during Q2, but rates continue to show growth and margins are still good. FTR expects regulatory conditions and a continued economic recovery to fuel an accelerating index during 2016.
FTR highlighted three key takeaways from the latest TCI:
- Freight growth has slowed but is on track for the 6th straight year of annual gains.
- Drops in fuel costs continue to be a positive for everyone involved – truckers, shippers, and consumers. However, labor costs have shown substantial increases, which is keeping up the pressure for rising rates.
- If fuel prices jump during 2016, just as capacity is tightening, it could cause a significant acceleration in rates.
Details of the June TCI can be found here.
“It was a positive sign for trucking that the index rebounded in June. May was the lowest level in 3 years, but June was the best month so far in 2015,” said Jonathan Starks, FTR’s director of transportation analysis. “Continued declines in fuel prices during July and August should help to keep the index elevated as the industry prepares for the fall shipping season. The fall peak may not be as strong this year but the economy continues to chug along, and contract rates are still growing versus last year.”