FTR’s Shippers Conditions Index, comparing 2014 with 2013.

BLOOMINGTON, IN – Freight transportation forecasting firm FTR said modest recovery growth and slow contract rate increases in the U.S. now come with a side of increased labor and recruiting overhead costs.

“Capacity is tight but has moderated from the critical level that we operated in during and just after the winter months. Freight rates seem to be a tale of two cities with contract rates very stable and only showing modest growth, yet spot rate activity has been quite strong since winter hit and has not let off since then,” said Jonathan Starks, FTR’s director of transportation analysis.

FTR’s Trucking Conditions Index in May, at a reading of 5.74, shows that what it called “a near capacity crisis environment” through May is expected to have eased somewhat in June. While still in solidly positive territory, the index outlook has moderated.

Starks said that if economic growth continues to remain modest, “then we would expect the status quo to persist for some time; however, if the economy finally shows a strong growth spurt in 2014 there isn’t sufficient surge capacity in the truck market to be able to easily accommodate that growth.”

When combined with the inability to quickly add more drivers into the industry, Starks said FTR then expects rate growth to accelerate in both the spot and contract markets.