The JOC Truckload Capacity Index remained flat at 79.7 in the first quarter, the lowest reading in the recently revised index’s six-year history.
That indicates tractor counts at the group of motor carriers tracked by The Journal of Commerce are about 20 percent below their peak at the end of 2006.
The capacity index dropped to 79.7 in the fourth quarter of 2012 after falling 2.3 percentage points from a recent peak of 82 in the second quarter last year.
The quarterly index uses fleet capacity levels in the 2006 fourth quarter as its base value. This month the index was revised to more accurately track capacity.
“Some companies in our truckload group this quarter began reporting average tractors available rather than actual tractor counts, which made for an apples-to-oranges comparison,” said William B. Cassidy, senior editor and creator of the index.
“Removing their data forced a revision of the index back to 2006, and actually lowered index readings by 2 to 3 percent,” Cassidy said. One of the carriers removed from the index consistently added capacity in recent years, he said.
“That in part accounts for the gap between the revised index and the old one,” he said. “Overall, the trend line of the new index tracks the old one closely.”
The JOC index data supports other studies and reports that large truckload carriers slashed their fleets by up to 20 percent or more during and after the recession.
Since 2009, the index has dropped 6.2 percentage points, after falling 14.1 percentage points in 2007 and 2008. “These carriers made major cuts in capacity in the recession and have been culling their fleets ever since,” Cassidy said.
The largest truckload carriers are gradually replacing older equipment or already have fairly “young” tractor fleets. They are expanding only when and where they can get an adequate return on investment for the additional capacity, he said.
Speakers at the NASSTRAC Shippers Conference in April noted the trend and suggested shippers would increasingly turn to third-party brokers to gain access to capacity provided by tens of thousands of smaller trucking companies.
In the video below, Senior Editor Bill Cassidy explains the JOC Truckload Capacity Index.