FTR’s TCI for December reflects a modestly weaker market for trucking companies

FTR’s Trucking Conditions Index for December fell to a reading of -4.31 from -1.35 in November. Although December’s TCI was weaker than November’s index, it otherwise indicated the least negative overall market conditions for carriers since May. December’s decrease was due mostly to a higher cost of capital and a deterioration in freight rates. The outlook remains below neutral market conditions through 2024.

Avery Vise, FTR’s vice president of trucking, commented, “We finally see indications that larger carriers are no longer absorbing the bulk of driver capacity displaced by failing small carriers, suggesting a steady tightening of capacity that eventually could spark a turn in the market. If the recent upturn in diesel prices continues, the capacity drain among small carriers might accelerate. Even so, the industry will need stronger freight demand, and we still don’t see any significant inflection in volume until at least the second half of this year.”

Details of December’s TCI are found in the February issue of FTR’s Trucking Update, published on January 31. The February edition includes a discussion of how recent U.S. economic data exposes the flaw in relying on raw economic data in assessing freight volume. 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.