FTR Trucking Conditions Index down sharply from April to May

The TCI, which reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight, dipped 4.0 points from 9.1 in April to 5.1 in May, the most recent month for which data is available.

By ·

What a difference a month makes.

That was the main message in the most recent edition of the Trucking Conditions Index (TCI) from freight transportation forecasting consultancy FTR Associates.

The TCI, which reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight, dipped 4.0 points from 9.1 in April to 5.1 in May, the most recent month for which data is available.

According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above ten indicating that volumes, prices, and margin are in a good range for carriers. The firm said that the May TCI represents its lowest level in six months and reflects soft pricing results for the first quarter of this year and the moderate levels of driver shortages.

“The weakening recovery is making itself felt in lackluster growth in truck freight demand,” said Larry Gross, FTR Senior Consultant, in a statement. “Although carriers have been very disciplined thus far during the recovery, choosing not to add capacity, the lack of freight volume growth is constraining the industry’s ability to raise rates.  We still expect industry conditions to slowly improve from here as we progress into the second half of the year.”

Even though this edition of the TCI is based on May data, Gross said in an interview with LM that there is not a huge difference in market conditions between then and now, with anecdotal reports indicating there is very modest growth in demand due to the slowdown in the economy.

What’s more some of the federal regulatory actions—like HOS and CSA—that are anticipated to cause tightness in driver supply are getting delayed and moving more slowly than originally expected, which Gross said leaves carriers in not as strong a position to raise rates.

“That is the core issue, and there is a tailwind in the form of fuel prices, with truckers mostly insulated from the costs and benefits of that by the fuel surcharge mechanism,” he said. “The current pricing of fuel prices helps truckers even though the fuel surcharge goes down. It is a mixed bag.”

As for how trucking market conditions may shape up between now and through the end of October, which is commonly viewed as prime time for Peak Season, Gross said FTR would expect a gradual tightening in the coming weeks. But barring any unforeseen events like an uncontrolled financial meltdown in Europe or a trade issue with China, FTR would expect some slow improvement in the TCI and a slower tightening in the market.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

FTR Associates · TCI · Trucking · All Topics
Latest Whitepaper
Partnering for Supply Chain Success with FRAM Group and True Value
Disruptive forces such as new technology, changing regulations, talent shortages, and infrastructure bottlenecks continue to be the prime focus for supply chain executives and managers.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...