While showing solid month-to-month improvement, the most recent edition of the Trucking Conditions Index (TCI), which was recently issued by freight transportation consultancy FTR, still 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 January, the most recent month for which data is available, the TCI came in at -1.71, a significant improvement over 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 said that January’s reading was paced by stronger freight volume and rates partially offsetting weaker utilization, as well as a fuel cost environment that was less positive than it was in December. What’s more, the firm said that the January TCI could be the “least unfavorable for carriers in a while,” adding that its current outlook calls for consistently negative TCI readings into the third quarter 2024, with the caveat that swings in diesel prices could result in some outliers. And it added that, looking ahead, fuel costs are expected to be a positive contributor to the February index.
“While overall market conditions for trucking companies remain negative, we still see varied impacts among carriers based on size and type of operation,” said Avery Vise, FTR’s vice president of trucking. “For example, freight volume in the van segments looks largely stable or better after a decline in the second half of last year, but more specialized segments are expected to see continued weakness this year. Also, financing costs have been a consistently negative factor for about nine months as the Federal Reserve battles inflation with higher interest rates, but those costs tend to hurt smaller operations more than larger ones. The recent troubles in the banking sector have further increased the degree of uncertainty as the economy and freight markets move toward a post-pandemic norm.”
