Weaker spot rates are mainly to blame for a decline in the latest FTR Trucking Conditions Index. The index slipped in November to a reading of -1.58. The forecasting firm characterized this performance as one of conditions “holding in a narrow window” that generated “slightly negative” readings for the TCI.
As for an overall forecast, FTR expects trucking conditions “to remain in near neutral range until conditions improve modestly” late this year.
“Conditions certainly are not as good as trucking companies would like,” said analyst Avery Vise, vice president of trucking. “But fundamentally they are not as bad as people may hear. We continue to see many business failures, but the principal driver appears to be trucking insurance costs, not market fundamentals.”
In addition, he described capacity utilization as “low but stable.” And he noted that, “Weakness in manufacturing especially has dampened freight demand, but solid consumer spending and improving construction activity are holding up a floor on volumes.”
FTR’s TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel price, and financing.
The individual metrics are combined into a single index indicating the industry’s overall health. A positive score represents good, optimistic conditions while a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings (up or down) suggest significant operating changes are likely.
Details of the November TCI are found in the January issue of FTR’s Trucking Update report. The report also includes data and analysis on load volumes, capacity, rates, costs, and the truck driver situation.