A Rising TCI Gives New Hope to the Trucking Industry
The Trucking Conditions Index (TCI) of FTR rose to 5.8 in August, compared to 4.4 in July. Since the beginning of 2011, despite a weakening economy, the TCI continued to hover in a mildly positive zone. However, it did not indicate any clear direction for the industry. In this backdrop, the recent spurt in the index is a significant new hope for faster growth in the trucking business but this may be wishful thinking. What happens on November 6th, 2012 will impact this business just like it does every other and the TCI will improve under more business friendly conditions.
America is already being pounded into submission because of regulations; many people wonder how much more it can take?
A Shortage of Drivers
Jonathan Starks, director of Transportation Analysis for FTR, said: "Setting aside the inherent economic risks at the moment, we expect the rate environment to improve for fleets as capacity tightens in 2013 when more stringent Hours-of-Service rules go into effect. This will also have the effect of worsening the driver shortage, moving the situation from the currently "tight-but-manageable" level towards a more acute shortage, similar to that experienced back in 2004, when the last major rule change went into effect." These do not seem to be encouraging words for the industry.
Regulations Drive Up Costs and Eliminate Jobs
The conditions for the trucking industry may not look any brighter now than it does a year from now if the current American leadership remains the same, but it is still important to keep a close watch on the developing economic environment over the coming months. What happens on Nov. 6th, is going to be monumental for the trucking industry and every industry under the flag. Starks cautioned: "A major downshift in growth would have major negative implications on margins just as the new tranche of HOS regulations go into effect." Some things just really do not have to be said.