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Trucking Conditions Index Heads Higher

November 12, 2014

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FTR’s Trucking Conditions Index. Graphic: FTR
FTR’s Trucking Conditions Index. Graphic: FTR

A measure of business conditions in trucking industry has moved up again reflecting strong underlying market trends.

The Trucking Conditions Index, from the freight transportation forecasting firm FTR, registered 9.07 for September, according to a just released report.

The TCI has moved up in the last couple of months due to increased rate gains and will remain in very positive but stable territory for the foreseeable future, according to FTR.

It expects little change in the TCI unless and until there is a change in the economy or increased regulatory drag on capacity. FTR saod capacity utilization currently stands very close to its all-time record and is at the breakpoint between manageable tightness and crisis.

"Spot market activity and rates have been easing, but this is to be expected at this time of year. Rates are still well above year ago levels and will stay that way until we lap winter conditions in January and February,” said Jonathan Starks, FTR's director of transportation analysis. “The contract market is lagging on rate growth, but we still see a concerted upward shift over the last year.”

He noted the combination of hours-of-service changes in 2013 with weather events in early 2014 was enough to move market conditions in truckers favor.

“Contract negotiations will take place during the winter slow season [and] we will see how much market clout the fleets are able to use,” Starks said. “The real results will come later in the year. Successful shippers will be able to secure capacity and limit cost inflation by working with their carrier base rather than focusing on negotiating strength."

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