Report: Transportation industry shows improvement

While the recently implemented hours-of-service (HOS) regulations have made some fleet managers turn to logistics software to cut fuel costs and miles driven, there is evidence the transportation industry has not yet been hit quite as hard by the rules as some people anticipated.

Conditions show marked improvement
According to the Trucking Conditions Index recently released by FTR Associates, July showed strong improvement for the transportation industry. The index leaped 30 percent month-over-month to 8.41. This indicates there will be increased demand on carriers and the HOS changes have not yet been detrimental to fleet owners.

The index summarizes various elements that have an impact on the industry. A reading of more than 10 indicates prices and margins are favorable for transportation companies, meaning the index has continually risen in favor of these operations in recent months.

"There still remains very little hard evidence of the impacts from the recent introduction of new hours-of-service rules on July 1, but anecdotal accounts and very early data are starting to show some potential impacts," said Jonathan Starks, director of transportation analysis for FTR. "Unfortunately, freight demand has remained lackluster with very little movement up or down outside of normal seasonal activity."

According to Starks, manufacturing indicators have also remained strong, which could hint at more business for carriers down the line. As more goods are produced, manufacturers need to have them shipped across the country or region - or sometimes locally - to be completed, sold or used.

Steady rise may continue throughout the year
Freight demand could be slowly increasing because of the rapidly approaching holiday season. Retailers are already gearing up for a busy fourth quarter and stocking their shelves appropriately. As the end of the year draws near, retailers could increase orders further to ensure consumers are satisfied, thus tightening capacity among transportation companies.

As demand for cargo space increases, transportation companies that are already understaffed may notice an additional demand on their resources and struggle to keep up with their clients' needs, especially if more customers require additional services as the holiday season approaches. By relying on route optimization software, these firms can ensure pickups and deliveries are made on schedule and that the rising Trucking Conditions Index helps their business grow and improve.