FTR Trucking Conditions Index improves but remains firmly in negative territory
Following its lowest reading in more than two years, the new edition of the Trucking Conditions Index, which was issued today by freight transportation consultancy FTR, showed some improvement, while remaining in negative territory, for the seventh consecutive month.
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 November, the most recent month for which data is available, the TCI reading came in at -7.94, following October’s -11.25 reading, its lowest level since the April 2020 all-time low, at -28.66. The September TCI reading came in at -2.35.
FTR officials observed that the November TCI reading, while still firmly negative, showed sequential growth amid what it called a weakened freight environment. The company said that the lone positive contribution to November’s TCI reading was freight volume, as all of the index factors were less negative, with the exception of freight rates, which were “the most negative” going back to May 2020.
“The outlook for trucking conditions has changed little, and we still do not forecast any positive readings for the Trucking Conditions Index until late 2024,” said Avery Vise, FTR’s vice president of trucking, in a statement. “The recent deceleration in consumer inflation certainly is a positive development, but we do not anticipate that it will lead to any meaningful increase in consumption. The industrial sector remains sluggish. Improved automotive output remains an upside possibility but only if vehicle sales improve and the supply chain remains stable. Slowing trucking job growth and carrier creation coupled with a surge in carrier failures likely mean the industry is starting to lose driver capacity. If so, market conditions for carriers might outperform our current outlook starting late this year as capacity could prove tighter than reflected in our forecast, potentially leading to stronger rates.”
