FTR’s Trucking Conditions Index for May was strong, but volatility is likely

FTR’s Trucking Conditions Index for May rose to 3.56, which is the strongest reading since February 2022. The April index level was -0.81, which was roughly in line with the two months prior. While May’s TCI was strong it also probably was an outlier. The near-term outlook is for negative or near-neutral market conditions for carriers.

Avery Vise, FTR’s vice president of trucking, commented, “The unusually robust TCI reading in May – certainly by the standards of the past couple of years – speaks more to the volatility of market conditions than it does improvement. The index’s largest positive factor was falling diesel prices, which was not the situation in June or July, of course. Nor do we expect May’s big improvement in freight volume to be sustained. As we have noted, the supply chain’s efforts to anticipate and respond to changing tariff policies and other uncertainties make it difficult to get a firm read on the truck freight market’s trajectory. We still expect the start of a modestly more favorable market for carriers by early next year, but, frankly, we still see significant risks both to the upside and downside.”

Details of the May TCI are found in the July issue of FTR’s Trucking Update, published June 30. The July issue also discusses how rising insurance premiums could be a catalyst for a capacity shakeout, as the increased cost for small carriers may force them to leave the market. 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.