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Weak Growth in January 2016

Weak Growth in January 2016

Recently in the news, Freight Transportation Intelligence (FTR) published a new report forecasting what is ahead for the truck freight industry in 2016 and beyond. According to the report, a slow growth has been recorded and forecasted for the trucking transportation, based on the FTR’s Trucking Conditions Index (TCI) report for the month of January 2016. The report was published on the firm’s website on March 15th 2016. As reported, the index went down to 9.05 in January after a high reading of 10.88 in December 2015.

FTR’s chief operating officer, Jonathan Starks, believes that the current data shows that most of the last year’s predictions did come true. But this also means that the prospects for 2017 were looking much brighter.

He said, “Growth in the highly visible long-haul dry van segment has notably slowed and has actually been negative for the last year. The data that has come out of the spot market for the last year highlights those results with capacity much looser and rates down. However, the contract market has held up relatively well during that same stretch of time.”

FTR also reported that it can be quite easy to handle the current freight demand by the existing carrier capacity, but the market should prepare itself to show a reaction towards the oncoming probable regulatory crisis by 2018. The report also highlight that there are very likely chances that the freight index will move into double digits by the end of this year. This could potentially serve as a great rebound in line with consistent freight growth after the traumatizing weak January of truck loadings, according to FTR. The report further moved on to point out that the market conditions are likely to slowly slip away and become more volatile, as the existing economic recovery is complete.

Talking about the trucking conditions in March and forth, Stark stated, “We are hearing of a much tougher negotiating environment for truckers heading into the spring freight uptick.” He further added, “Headwinds to the recovery are building and 2016 is not likely to be as strong a year for truck operators. After 2016, however, the situation could begin to reverse as carriers implement ELDs and speed limiters ahead of the mandatory dates set for late 2017 and early 2018. Even if the economy sours between now and then, the impact of those regulations could be enough to keep capacity relatively tight and rates neutral.”

Stark’s words depict a promising 2017 and 2018; however, the report still seemed to remain uncertain about 2016 and its impact on the trucking industry.

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