In recent years, the transportation industry has seen a slow but steady increase in demand, thanks to the gradual economic improvement and a jump in orders. This escalates a company's need for route planning software, as more pickups and deliveries can throw a driver off schedule if he or she is not taking the most direct route.
This growth in the industry is seen in the latest Trucking Conditions Index (TCI) from FTR Associates. The measure, which now takes into account truckload pricing, along with other key industry metrics, revealed there was positive growth within the industry in June. The TCI improved by 30 percent in June, when compared to May's numbers. The index jumped to 6.46; any number above zero is typically seen as a positive indicator for the industry.
According to the indicator, active truck utilization spiked as a result of the new hours-of-service (HOS) regulations beginning to take effect. FTR estimates these rule changes will result in an overall 3 percent drop in productivity, but additional, less controversial regulatory restrictions could further hit productivity between 2014 and 2016.
"As the industry has struggled to implement reasonable price increases despite a high level of truck utilization, our index has incorporated a more complete picture of the carrier's operating environment," said Jonathan Starks, director of transportation analysis at FTR. "The onset of HOS changes is expected to tighten capacity further and should lead to a more robust rate environment as we move through the fall shipping season. The major factors in our anticipation of continued elevated levels in the index are capacity and rates."
Enhancing business processes
As conditions continue to improve and the TCI continues to rise, carriers will need to ensure they're taking the fastest routes that will ensure deliveries and pickups are made on schedule - especially with the new HOS regulations in place and potentially hindering future productivity. Fleet managers that rely on route optimization software to help them plan runs can not only save time, but also find they are more easily able to ensure drivers will make predetermined stops without encountering delays and limit fuel spend in the long run.