FTR’s Trucking Conditions Index Remains Positive as Capacity Tightens

FTR’s Trucking Conditions Index (TCI) for July remains in a positive range with a reading of 5.75 reflecting tightening capacity, rising spot rates and a further impact this fall and winter from the implementation of Electronic Logging Devices. As detailed in the September issue of the Trucking Update, the TCI measure has not risen higher because it’s driven in large part by contract market conditions and it’s the spot market segment that is currently being pushed higher. Spot market data continues to support FTR’s near 100% active utilization index. Contract prices are expected to increase in 2018 as capacity further tightens which will move the Trucking Conditions Index up through the year.

Details of the July TCI are found in the September issue of FTR’s Trucking Update, published September 1, 2017. The ‘Notes by the Dashboard Light’ section in the current issue focuses on the relationship between strong market conditions and driver shortages. Along with the TCI and ‘Notes by the Dashboard Light,’ the Trucking Update includes data and analysis on load volumes, the capacity environment, rates, costs, and the truck driver situation.

Jonathan Starks, Chief Operating Officer at FTR, commented, “The combination of multiple hurricanes, strengthening spot market conditions, and the final push towards ELD implementation means trucking is ready to shift into a higher gear. Fleets are finally starting to talk positively about market conditions after being stuck in a relatively sluggish environment for more than a year. Spot rates were up double-digits versus last year before the hurricanes hit and have surged further since then. When you add in a slightly more robust economy, capacity reductions due to Hurricanes Harvey and Irma, extra freight for storm recovery, and productivity reductions as ELDs are fully implemented; that’s a market which gives fleets a reason to be optimistic as we head towards 2018.”

The Trucking Conditions Index tracks the changes representing six major conditions in the U.S. truck market. These conditions are: freight volumes, freight rates, fleet capacity, fleet bankruptcies, fuel price, and financing. The individual metrics are combined into a single index that tracks the market conditions that influence fleet behavior. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem, while readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment, and double-digit readings (both up or down) are warning signs for significant operating changes.

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