Trucking news and summaries for Monday, June 17, 2024:
Truck transport conditions improved significantly in April
According to FTR’s latest report, conditions for trucking companies improved significantly in April compared to March.
The FTR Trucking Conditions Index indicated a more favorable environment for trucking companies in April but was still negative, rising from -7.25 in March to -1.95, the highest reading since January when the TCI was at -1.41.
The company noted that both freight rates and financing costs narrowed their negative margins in April, and cargo volumes also improved in the month.
“While there are signs of a turnaround for trucking companies, the market still needs to navigate a challenging landscape of excess capacity and weak freight demand,” said Avery Vice, FTR’s vice president of trucking. “The May trucking employment report suggests this transition is underway, but a healthier landscape for carriers will continue to require right-sizing capacity and increasing volumes. Consistently favorable market conditions for carriers are not expected until early next year.”
The index has not posted a positive reading in any month since the beginning of 2022. The remainder of the year is likely to remain mostly moderately negative, but FTR said there could be exceptional positive readings as the index approaches neutral territory.
As Vice noted, trucking industry employment bucked the overall economy trend in May. The Bureau of Labor Statistics’ monthly report showed the trucking industry lost 5,400 jobs while the overall economy added 272,000 jobs. Despite the trucking industry job losses, the transportation sector as a whole added about 11,000 jobs in May.
According to Motive’s June Monthly Economic Report, 1,229 trucking companies exited the market in May, a slight increase from March but 67% lower than January. May marked the third consecutive month with fewer than 2,000 exits, indicating market contraction is stabilizing and moving toward positive growth, the company said. Motive also noted that 8,466 new trucking companies registered in May, marking the fourth consecutive month with more than 8,000 new entrants.
FMCSA decides to increase UCR fees by 25%
The Federal Motor Carrier Safety Administration will publish a final rule on Monday, June 17, that will officially increase rates for Uniform Carrier Registration (UCR) plans and contracts for the 2025 registration year and beyond.
The agency in January announced a proposal to raise fees for the 2025 registration year by 25% over 2024. For authorized owner-operators of one truck, that means an extra $9 in spending per year. Fleets with 1,000 or more trucks would pay $9,000 more than they would in 2024.
FMCSA noted that the increase follows fee reductions of an average of 37.3 percent over the past two years.
If toll collections result in shortfalls or excesses over those allowed by statute, the plan’s committee will make recommendations to the Secretary of Transportation for toll adjustments, which are required by federal law. The toll increases will generate $13 million in revenues that will enable the UCR plan to fund states’ revenue entitlements by making up for revenue shortfalls resulting from registration fee reductions over the past two years, FMCSA added.
The agency noted that several commenters to the January proposal sought clarification on how the fees would be used and said the adjustments were “unreasonable” or “unexpected.”
The FMCSA said the fee is used by participating states for trucking safety programs and enforcement, adding that it believes the increase, the first since 2010, is “within a reasonable range.”
“Any amount less than these adjustments would impede the proper operation of a motor carrier’s safety program, enforcement, or administration of its UCR plan and UCR agreement,” FMCSA said.
[Related: FMCSA looking to increase UCR fees by 25% for next year]
