February Commentaries

Coronavirus: Assessing the Global and Domestic Threat
By Steve Graham, FTR Partner

The coronavirus is a growing threat to the fragile Chinese and global economies. Although we cannot know exactly how the virus’s effects will pan out, the macroeconomic impact will not be insignificant. In this commentary from FTR, we offer insight into how the virus may affect the North American transportation markets.


Understanding EDD (Economically Derived Demand)
Truck & Trailer Outlook Commentary

Economically Derived Demand, or EDD, is a metric that allows you to view and understand the amount of equipment needed to support freight movements in a given year. Developed by FTR, this measurement breaks down demand for equipment into two unique categories; The replacement of current equipment and the amount of freight being put into the system. The end result is a tool that accurately portrays the underlying pressures on the system so that you can plan ahead.

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Conditions Indices & Equipment Orders

FTR Trucking Conditions Index Takes Bump Up in December

Trucking Conditions Index
FTR’s Trucking Conditions Index (TCI) rose to 3.02 in December on improved freight demand and spot rates. The December reading is the highest since January 2019 and the first positive reading since 0.28 in July. FTR expects the TCI to return to readings closer to neutral conditions before improving modestly in the second half of 2020.

Details of the December TCI are found in the February issue of FTR’s Trucking Update, published January 31. The ‘Notes by the Dashboard Light’ discusses key 2019 economic indicators in the consumer, industrial, and trade sectors in relation to the rest of the 2010s. Along with the TCI and ‘Notes by the Dashboard Light,’ the Trucking Update includes data and analysis on load volumes, the capacity environment, rates, costs, and the truck driver situation.

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FTR's Shippers Conditions Index Slips in December to a 4.6 Reading

FTR’s Shippers Conditions Index for December slipped to 4.6 from its November reading of 7.0. While not as strong as November, utilization and logistics costs remained positive factors, with December freight volume slightly negative. The only input to the SCI more positive in December versus November was fuel costs. The feared impact of IMO 2020 on fuel costs has not yet materialized. Diesel prices at the beginning of February were the lowest in more than two years.

FTR expects shipper conditions to remain slightly positive through 2020 but weaken further toward neutral later in the year.

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FTR Reports Trailer Orders for January Basically Unchanged from December at 16,600 Units

FTR reports that preliminary trailer orders for January were basically unchanged from December at 16,600 units. This is the lowest January order activity since 2011. Over the past twelve months, Trailer orders have totaled 194,000 units.

Orders remained in a narrow track for the third consecutive month, closely following the trend in the Class 8 market reflecting cautious equipment buying by fleets. Large fleets, especially leasing fleets, are not ordering many vans. Additionally, the flatbed market remains weak due to the sluggishness in the manufacturing sector of the economy.

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FTR Reports North American Class 8 Orders for January at 17,700 Units

FTR reports preliminary North American Class 8 orders for January at 17,700 units, following a consistent trend over the last four months when orders have averaged 19,000 trucks. The January total, -10% m/m and +12% y/y, suggests fleets are ordering only the equipment they are sure they need in the short term. FTR expects Class 8 orders to remain in this narrow range through the first quarter of the year. Class 8 orders for the past 12 months have now totaled 181,000 units.

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