In the August issue of FTR’s Trucking Update, FTR reported that its Trucking Conditions Index showed some positive upward movement in June after moderating slightly during the prior two months. FTR said that the June reading of 7.64 reflects an environment in which carriers are gaining market power but rates are struggling to keep up with cost inflation. The index rose 1.9 points from May, yet April and May were substantially below the 8.35 average seen during Q1, the company reported.
“The headline number of 4% for GDP growth in the second quarter is getting plenty of news but the real number for getting a sense of true demand in this economy is the Final Sales component of GDP,” said Jonathan Starks, FTR’s director of transportation analysis. “It stood at 2.3% in Q2, well above the -1% seen in Q1 but noticeably below the 3.5% it averaged during the second half of 2013. Truck freight continues to show steady increases and the capacity situation is unlikely to loosen up any time soon. These good developments are partially offset by slower than expected growth in contract rates. Spot market rates are still elevated, although they have shown normal moderation during the summer months. We expect to see both spot and contract rates continue to rise as we get into the fall shipping season.”