FTR’s Trucking Conditions Index for March fell more than five points from the previous month’s record high. But it remains indicative of a favorable environment for carriers.
March’s TCI fell to 10.30 from 15.41 the month earlier, but was more than triple March 2017’s TCI reading of 2.97. While the number fell in March, FTR says that it was not indicative of a fundamental change in the current freight demand climate.
FTR expects the carrier-favorable environment to continue through the rest of the year with even more favorable conditions possible during the second and third quarters.
“While diesel prices increases are a negative for the carriers, the relatively modest uptick in recent fuel costs is more than offset by significant gains in pricing and overall strong demand for transportation,” said Jonathan Starks, chief intelligence officer at FTR. “The Market Demand Index published by Truckstop.com and FTR shows that the spot market is once again tightening, rising each of the last four weeks to 58.1 in week 18. It is likely to hit new record highs as we approach the summer shipping season at the end of May.”
Favorable conditions are likely to peak and then stabilize in 2019 as fleets continue to add capacity and suppliers adjust new regulations.
“The latest data suggests that the capacity crunch has stabilized somewhat following the electronic logging device implementation, but it certainly has not abated,"said Avery Vise, vice president of trucking research at FTR. “The most recent jobs report serves as a warning that carriers might find adding capacity tougher in the months ahead, an outcome that could help maintain margins but limit revenue opportunities.”