Overall Trucking Conditions Improve but Remain Negative in FTR’s Index

FTR’s revised Trucking Conditions Index showed significant improvement for the month of June thanks to strengthening freight demand and lower fuel prices, but other factors are likely to keep things subdued through the rest of the year.

Despite the gains, FTR’s TCI had a reading of -0.82 for June as trucking conditions were weighed on by multiple factors such as weak truckload rates, easing capacity utilization and some higher financing costs that are negatively affecting carriers.

“Although rates remain weak for carriers, they appear at least to be stabilizing,” said Avery Vise, vice president of trucking at FTR. “Meanwhile, freight demand appears firmer in recent weeks than in early spring, but the outlook is far from rosy given a softening industrial sector.”

The Trucking Conditions index tracks changes in the U.S. truck market related to freight volumes, freight rates, fleet capacity, fuel prices, and financing and combines the metrics into a single score. A positive score reflects good conditions for trucking while a negative score represents bad conditions. FTR uses the TCI to show the industry’s health at a glance.

FTR’s forecast for the TCI is for it to remain in the negative single-digit range into 2020, but some positive readings are possible during 2019.

Vise went on to say FTR’s biggest near-term concern is the potential impact of the trade war with China on consumer spending and business investment.

President Trump had recently indicated on Twitter that he intends to place a 10% tariff on an additional $300 billion in imported goods from China on Sept. 1. The tariff would affect prices for many consumer goods ahead of the holiday season that are not affected by the current 25% tariff. However on Aug. 13, the President walked back his threat, saying that he would delay the new tariff until Dec. 15.