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FTR Intermodal Competitive Index Stronger in September

November 22, 2016, 07:00 AM
Filed Under: Trucking

FTR’s Intermodal Competitive Index (ICI) rose again in September to a reading of 4.95.  The updated September reading, in moderately favorable territory, reflects increased utilization rates in the over-the-road truck market and stabilizing fuel prices, among other factors.

 Larry Gross, Partner at FTR and principal author of Intermodal Update, commented, “Although current competitive conditions remain difficult, the Intermodal Conditions Index looks at both current conditions and leading indicators.  The forward-looking components of the Intermodal Competitiveness Index are signaling an improving competitive environment for intermodal in the coming months.  We are, for instance, seeing quite a strong spot market in trucking right now, and spot rates have moved up.  Market conditions will improve as the implementation date for the Federal mandate for Electronic Logging Devices (ELD) on heavy-duty trucks approaches next year.  With the recent ruling in favor of the ELD mandate by the Federal appeals court, the probability of a delay in implementation is now very low.  Although only minimal growth is expected in long-haul freight demand, the negative capacity effects of the ELD mandate should be sufficient to tighten things up considerably and, thereby, improve intermodal’s prospects.”

The Intermodal Competitive Index is a compilation of factors affecting the competitive posture of the domestic North American intermodal sector versus over-the-road truck. Any reading below zero indicates a less-than-ideal environment for intermodal, while readings above zero are meant to communicate relatively favorable conditions. The higher the reading, the more favorable the intermodal environment appears to be. The ICI looks at a variety of factors including truck capacity, fuel prices, rail service, intermodal rates, and so forth.

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