This metric measures the number of trucks needed by the market to move the current level of freight and compares that figures to the total population of trucks (whether in service or idled) that are available.
Total Truck Utilization is a measurement of the tightness of truck equipment. It measures the number of trucks needed by the market to move the current level of freight and compares that figures to the total population of trucks (whether in service or idled) that are available.
In general, a figure above 90% indicates a tightening equipment market where the ability to add used equipment into service is becoming limited. A figure above 95% indicates an extremely tight equipment market and could hinder the ability of carriers to add capacity. A figure below 85% indicates a weak market where a significant portion of the truck population is idled or underutilized.
Total Utilization(%) = [Needed Trucks] / [Total Trucks]
This is a combination of 3 primary pieces of information.
- How much freight is there?: There is no other source besides FTR that has a measure of all trucking freight. This is derived from our Freight-cast transportation model. This data tells us how much tonnage, # of loadings, Avg LOH, etc.
- Size of truck population: we have truck sales data going back to the 1930s and a mortality curve of truck life that estimates how many total available trucks are in the U.S. When we compare our outputs to results from other sources (such as IHS Polk registration figures) we get a comparable result as to the number of absolute trucks that are available.
- How productive are trucks?: We have a truck productivity model that has numerous inputs to help us understand how many loads the "average" truck is able to make in a quarter (speed, work hours, regulations, etc.). We compare the results to a selection of real-world data (i.e. truck orders, sales, etc.) to understand how well the outputs are comparing to actual results. When you compare the productivity factor (loads per quarter) to the total number of loads you have a raw estimate of how many vehicles are needed.
In the end, we are simply comparing the total number of needed trucks (bullet 3 - vehicles needed) versus the total number of trucks (bullet 2 - truck pop.) = Active Utilization %.