FTR’s Trucking Conditions Index showed substantial improvement in January, rising to a -1.71 reading from December’s -6.1. Stronger freight volume and rates partially offset weaker utilization and a fuel cost environment that was not as positive as it had been in December. January’s TCI might prove to be the least unfavorable for carriers for a while. FTR’s current outlook is for consistently negative TCI readings into the third quarter of 2024, although swings in diesel prices could yield some outliers. Fuel costs certainly will be a positive contributor to the February index.
Avery Vise, FTR’s vice president of trucking, commented, “While overall market conditions for trucking companies remain negative, we still see varied impacts among carriers based on size and type of operation. For example, freight volume in the van segments looks largely stable or better after a decline in the second half of last year, but more specialized segments are expected to see continued weakness this year. Also, financing costs have been a consistently negative factor for about nine months as the Federal Reserve battles inflation with higher interest rates, but those costs tend to hurt smaller operations more than larger ones. The recent troubles in the banking sector have further increased the degree of uncertainty as the economy and freight markets move toward a post-pandemic norm.”
Details of the January TCI are found in the March 2023 issue of FTR’s Trucking Update, published on February 28. The March edition also includes commentary about how the surge in small new for-hire carriers in 2020 and 2021 potentially affects the driver capacity situation in 2023. Beyond the TCI and additional commentary, the Trucking Update includes data and analysis on load volumes, the capacity environment, rates, and the economy.
The TCI tracks the changes representing five major conditions in the U.S. truck market. These conditions are: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. The individual metrics are combined into a single index indicating the industry’s overall health. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.