FTR’s Trucking Conditions Index for October reflects toughest overall environment since April 2020

Sharp increases in fuel and financing costs coupled with an unfavorable trend in freight rates resulted in a major deterioration of financial conditions for trucking companies during October. FTR’s Trucking Conditions Index (TCI) fell to a -11.16 reading from the -2.35 reported in September. The October TCI was the weakest since the all-time low reading of -28.66 in April 2020.

Avery Vise, FTR’s vice president of trucking, commented, “We do not see a month on the horizon as difficult as October was for trucking companies, but nor do we expect much for carriers to get excited about. The rate environment looks to keep market conditions at least mildly negative into 2024. Plunging diesel prices obviously are bolstering financial conditions in the near term, and the hit from financing costs likely will begin moderating by mid-2023. Those costs have disproportionately hurt smaller carriers recently, and improvements in those situations likewise will not help larger carriers as much as smaller ones.”

Details of the October TCI are found in the December 2022 issue of FTR’s Trucking Update, published on November 30. The December edition also includes commentary discussing why a strong third quarter for the U.S. economy did not translate into strength for the freight economy and why FTR’s freight outlook weakened significantly in the latest forecast. Beyond the TCI and additional commentary, 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.