Trucking Headwinds Include Higher labour, Recruiting Costs

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Posted on July 17th 2014 4:30 PM

Headwinds affecting trucking that included modest recovery growth along with the lack of acceleration in contract-rate increases are accompanied now by increased labor and recruiting overhead costs, according to transportation forecasting firm, FTR Associates.

As reported by Fleet Owner, FTR’s latest Trucking Conditions Index shows “a near-capacity crisis environment through spring eased somewhat in June.”

“While still robustly positive, the TCI has moderated recently and reflects some of the challenges currently facing the industry,” said Jonathan Starks, FTR’s director of transportation analysis.

“Capacity is tight,” he continued, “but it has moderated from the critical level that we operated in during and just after the winter months.”

Starks described freight rates as “seeming to be a tale of two cities” as contract rates are “very stable and only showing modest growth, yet spot-rate activity has been quite strong since winter hit and has not let off since then.

“If economic growth continues to remain modest,” he continued, “then we would expect the status quo to persist for some time; however, if the economy finally shows a strong growth spurt in 2014 there isn’t sufficient surge capacity in the truck market to be able to easily accommodate that growth.

“When combined with the inability to quickly add more drivers into the industry,” Starks added, “we would then expect rate growth to accelerate in both the spot and contract markets.”

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