FTR’s Trucking Conditions Index strongest since February 2022

FTR’s Trucking Conditions Index rose to 4.85 in December from the 2.14 reading in November, driven largely by stronger freight rates and capacity utilization. As measured by the TCI, overall market conditions are the most favorable for carriers since February 2022 and are largely expected to remain favorable over the forecast horizon.

Avery Vise, FTR’s vice president of trucking, commented, “The TCI already indicated consistently favorable conditions for trucking companies over the next couple of years, but the latest outlook is even stronger. FTR’s forecasts for the economy and for industrial activity improved significantly in the latest adjustment. We caution that the economic data fueling our improved forecasts is quite recent and subject to revision. However, other independent signals also point to a stronger truck freight market, including extraordinary spot rate increases in the wake of recent severe winter weather and the Institute for Supply Management’s healthy manufacturing index reading for January. FTR is not forecasting anything like the 2021 market, but something close to it no longer seems inconceivable.”

Details of the December TCI are found in the February issue of FTR’s Trucking Update, published January 30. The February issue includes a discussion of factors supporting a change in FTR’s forecast for truck freight volume. 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.