FTR Trucking Conditions Index Sees Sequential Improvements
The new edition of the Trucking Conditions Index, which was recently released by freight transportation consultancy FTR, saw some sequential improvements while remaining in negative territory.
According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above 10 indicating that volumes, prices, and margin are in a good range for carriers.
For July, the most recent month for which data is available, the TCI reading was -5.34, faring better than June’s -6.29, the lowest TCI reading going back to November 2022. May came in at May’s -3.75 reading. The April TCI reading was -3.88, faring better than March’s -5.83, which came on the heels of February’s -5.17 reading. This was preceded by January’s -1.71 reading, which came on the heels of December’s -6.1 and November’s -7.94. That was preceded by October’s -11.25, its lowest level since the April 2020 all-time low, at -28.66.
FTR said that July’s improvement over June was paced by improved freight volume and capacity utilization offsetting weaker freight rates and higher fuel costs. The firm added that carriers continue to face challenging market conditions, and surging fuel prices in August and September, which will send the TCI further down in the near term. Aside from fuel cost volatility, the outlook for trucking conditions is little changed with only gradual improvement toward neutral readings by the third quarter of 2024.
“The overall truck freight market remains unfavorable for trucking companies, but the financial situation for smaller carriers, in particular, is tightening due to surging diesel prices,” said Avery Vise, FTR vice president of trucking, in a statement. “Large numbers of small operations are exiting the market, and that exodus could accelerate if diesel prices continue to rise sharply. So far, the data suggests that larger carriers have absorbed much of that driver capacity, but truckload carriers are approaching a saturation point due to sluggish freight demand. Declining driver capacity could tighten the market modestly, but significant improvement for carriers will require stronger volume as well.”