Trucking Economy Pinching Carriers and Shippers  

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Shippers are feeling the stress alongside their trucking providers thanks to rising fuel costs — and facing the added challenge of the growing use of available truck capacity, reports James Menzies of Trucknews.com.  

“There’s reason to believe the freight market will take a turn for the better, but it may be slower coming than fleets hope, ACT Research reports. And Class 8 sleeper truck orders appear to be softening, while orders for vocational trucks and specialty trailers are picking up the slack.”

“Blame higher capacity utilization by carriers and rising fuel costs. These were the worst conditions shippers have seen in nearly a year, though still in slightly positive territory. And FTR expects fuel costs to continue hitting shippers in August’s reading.

“Stronger fuel costs were a driver of the Shippers Conditions Index to its lowest level in nearly a year. With rising crude oil prices, it appears the stronger diesel prices are with the industry for the foreseeable future,” said Todd Tranausky, vice-president of rail and intermodal at FTR. “This will limit how positive the SCI can be in future months and put it on a trajectory to hold near neutral unless fuel prices make another jump higher, in which case they could turn more sharply negative.”

ACT Research suggests there could be a turning point in the freight cycle ahead, but cautions it will likely not come as quickly as fleets would hope.

“This is the highest result in 18 months, but our diffusion indexes measure the breadth of a signal, not the strength,” explained Tim Denoyer, ACT’s vice-president and senior analyst. “This month’s number indicates volumes picked up for a big number of fleets in our survey, but it wasn’t necessarily a large increase. So, we wouldn’t suggest this means the freight downturn is over, but it is a considerable ‘green shoot’ that suggests the retail inventory de-stock is playing out.”

Full story here.

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