The new edition of the Trucking Conditions Index, which was recently released by freight transportation consultancy FTR, saw solid signs of improvement.
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.
And it explained that the TCI tracks the changes representing five major conditions in the U.S. truck market. These conditions include: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Individual metrics are combined into a single index indicating the industry’s overall health. A positive score represents good, optimistic conditions. And 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.
For November, the most recent month for which data is available, the TCI reading came in at 2.14, representing a significant gain over October’s 0.89 and September’s 0.42 readings.
FTR observed that stronger freight rates and capacity utilization drove the improvement towards more favorable motor carrier market conditions, adding that the TCI’s outlook is consistently positive over the forecast period.
“The latest available data indicates a substantial reduction of trucking capacity over the past year—a conclusion supported by stronger spot market rates than trend over the past month or so,” said Avery Vise, FTR’s vice president of trucking. “It’s quite possible that capacity has bottomed out, so the attention now is squarely on freight demand, which still looks sluggish with both upside and downside potential. Trucking companies cannot get to sustained margin recovery on capacity reductions alone.”
