The most recent edition of the Trucking Conditions Index from freight transportation consultancy FTR continued to reinforce the ongoing thesis regarding the current state of strong freight demand and tight trucking capacity.
The TCI reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital and freight.
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 May, the most recent month for which data is available, the TCI reading is 11.4, which is in line with April’s 11.4.
FTR said that trucking conditions are only expected to improve as freight season enters its peak, with the TCI expected to head up as the year goes on and into 2019. And it added that excluding fuel surcharges, total truckload rates are expected to be up 13% for 2018. FTR also noted that as more capacity is expected to enter the market, or come online, 2019 trucking conditions are expected to moderate somewhat but will still be ahead of recent years.
“Key indicators of freight demand such as manufacturing and construction remain strong,” said Avery Vise, FTR vice president of trucking research, in a statement. “Aside from any major negative impacts due to trade relations, which is difficult to forecast at this stage, freight demand should lead to even stronger trucking conditions in the near term. On the other hand, despite aggressive recruiting, a very tight labor market has allowed trucking companies to add only modestly to the driver force, keeping the industry at full active utilization. Therefore, two critical external factors in coming months will be trade and the labor market. Another factor will be the fuel environment as the direction of diesel and crude prices is unclear. Fuel pricing has risen a couple of times recently only to moderate slightly each time.”