FTR’s Trucking Conditions Index feels effects of declining rates and volumes

The most recent edition of the Trucking Conditions Index, which was recently issued by freight transportation consultancy FTR, highlighted sequential declines and remained in negative territory.

According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above 10 indicating that volumes, prices and margin are in a good range for carriers.

For February, the most recent month for which data is available, the TCI fell to -5.17, below January’s -1.71 reading. This was preceded by December’s -6.1 and November’s -7.94. That was preceded by October’s -11.25, its lowest level since the April 2020 all-time low, at -28.66. The September TCI reading came in at -2.35.

FTR officials attributed the February decline to the pairing of weaker freight rates and volume, explaining that those headwinds for motor carriers more than offset slight improvements in utilization and fuel costs. And they added that financing costs still represent a negative factor for carriers although they remain fairly stable. FTR added that going forward the TCI is forecasted to remain in negative “well into 2024.”

Avery Vise, FTR’s vice president of trucking, said in a statement that while market conditions for trucking companies weakened in February, the relatively better—though still negative—TCI in January was the outlier. 

“The industrial and consumer sectors are sluggish, although spending on goods is still elevated and consumer inflation is slowing,” said Vise. “Freight volume is holding up better than many anticipated, but downside risks are substantial. Although fears of a major banking crisis have abated since March, tighter lending standards by banks on top of the Federal Reserve’s interest rate hikes could slow the economy further.”