This month’s Market Update highlights some of the key factors that impact the transportation industry in North America, including the most recent Shippers Conditions Index (SCI) reading, which shows signs of improvement in overall market conditions. Read on for more on influencers impacting the transportation industry, and then share your thoughts on these topics.
Large Scale Market Indicators
FTR’s SCI compiles market influences that affect shippers and then assigns a rating. Readings above zero are rated as favorable; those below zero are unfavorable. The most recent index reports a May reading of -3.1, which is up from the -4.9 reading in April, a reflection of currently manageable capacity utilization and low fuel prices—something that is expected to stay intact through the end of 2015. Read more.
According to the American Trucking Association (ATA), U.S. truck tonnage rose only 1.8% in June from a year earlier. ATA Chief Economist Bob Costello expressed concern with flat factory output, falling retail sales, and elevated inventories at retailers, wholesalers, and manufacturers. Costello also mentioned that some retailers had purposely boosted inventory while the freight market was tight, thus not needing to order as much. Read more.
According to the ATA, the truck driver turnover rate is the lowest it has been in four years. In Q1 2015, the rate for operators of truckload fleets with over $30 million in revenue was down to 84%, and at 83% among smaller fleets. Retirement and departure from the industry account for about one third of the turnover, while the rest is attributed to drivers leaving one company for another. Read more.
On July 30, the Senate approved a House-passed, three-month extension of funding authority for highway programs. This marks the third funding extension in less than a year. Read more.
Diesel prices are down for the tenth straight week after falling another 5.5 cents—to $2.67—for the week ending August 3. Diesel prices are at the lowest weekly average price since October 2009, marking the longest decline in 2015. Read more.