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Friday, May 14, 2021

FTR: Economy, HOS to Squeeze Capacity in 2013

FTR Associates Shippers Conditions Index for November fell marginally from October to a reading of -5.3, the precursor to what is expected to be tighter capacity and more leverage for truckers in 2013.

The transportation forecasting firm projects that the combination of pending government truck safety regulations, continued slow growth in the economy and freight, and the reluctance of the trucking industry to add capacity will result in tighter conditions and rising truck rates towards the second half of the year.

However, “there are some important qualifications to this prediction,” says Larry Gross, senior consultant for FTR.

“Firstly, we are assuming that the current Washington gridlock does not result in a showdown that damages the recovery and derails the current slow-growth path. Secondly, we are making the assumption, based on the best information we currently have available, that pending court challenges to the Hours of Service revisions will not result in a court injunction, and that the revisions will go into effect as scheduled on July 1.

“If either of these events were to come to pass, then the capacity situation will be less problematic and rate increases will be far harder to come by for truckers.”