FTR’s Trucking Conditions Index falls in March mostly due to rates

FTR’s Trucking Conditions Index fell in March to -7.25 – the most negative reading since September 2023. The February reading was -5.31. Highly unfavorable freight rates were the principal headwind for the trucking industry in March as the market remains soft for trucking companies. Financing costs also were a significant negative factor in the TCI while other contributors to the index were generally stable.

Avery Vise, FTR’s vice president of trucking, commented, “Rates had been a slightly less negative factor for carriers recently, so March might prove to be an outlier in what we expect will be a gradually improving environment for trucking companies. However, we are not forecasting that either freight rates or overall market conditions will be favorable for carriers until early next year. Freight volume improvement and capacity rightsizing are progressing only incrementally, and we do not see anything on the horizon that clearly will change those dynamics. One factor we are watching is the cost of commercial auto insurance. Government data indicates steady increases in premiums over the past year after several years of mostly stable pricing. Continued increases might become a catalyst for accelerated carrier failures, which could yield a tighter market a bit earlier than we are forecasting.”

Details of March TCI are found in the May issue of FTR’s Trucking Update, published on April 30, 2024. Additional commentary in the May edition analyzes recent revisions in the Census Bureau’s estimates of retail inventories. 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.