A measurement of conditions in the trucking sector jumped in January to its highest level since February, 2022, lending credence to reports that a long recession in truck freight rates may finally be coming to an end, according to transportation analyst firm FTR.
FTR’s Trucking Conditions Index (TCI) rose to 9.3 in January from December’s 4.85 reading, the Bloomington, Indiana-based firm said. Reasons for that “robust” market included sharply stronger freight rates, volume, and utilization, although rising fuel costs will offset firmer freight dynamics, at least in the near term.
“Surging diesel prices in the wake of military operations in the Middle East will temper overall financial conditions for trucking companies in the near term, though even that development arguably will tighten capacity further by forcing out many of the weakest players. However, much stronger freight rates and rising utilization probably will keep most operations afloat, and the longer-term recovery in trucking looks solid,” Avery Vise, FTR’s vice president of trucking, said in a release. “Economic indicators point to an industrial sector recovery, which is key to trucking’s rebound as well. Carriers dependent on consumer spending, though, face more risks as rising gasoline prices add to consumers’ stress from stubborn inflation, a weakening job market, and tighter cash reserves.”
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single number, the index represents good, optimistic conditions when positive, and the opposite when negative.
