FTR Trucking Conditions Index stumbles, due largely to diesel gains

The most recent edition of the Trucking Conditions Index (TCI), which was issued by freight transportation consultancy FTR, took a major swing into the red, turning in a negative reading for the first time since May 2020.

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 March, the most recent month for which data is available, the TCI came in at -7.38, down significantly from February’s 12.06 reading, a month that show growth over January’s 11.46, driven by what FTR, at the time, called a “sizable increase in fuel costs as freight rates were strong and freight demand improved.”

But March was a different story, with FTR pointing to surging diesel prices and also a weaker positive contribution from freight rates. The firm also noted that while the general outlook for trucking is for “modestly positive conditions,” there is uncertainty in various areas, including fuel costs, capacity utilization, and rates.  

“Given the unprecedented surge in diesel prices during early March, a negative reading for the Trucking Conditions Index was hardly surprising,” said Avery Vise, FTR vice president of trucking, in a statement. “Fuel costs apparently will represent a big negative factor for May as well. The road ahead looks treacherous, but it is not necessarily bad for carriers. A stronger supply of drivers is enabling a shift of activity back to the contract environment from spot, but overall freight volume so far has remained strong. Consumer spending is still robust even when adjusted for inflation, and industrial activity is growing. In the near term, the larger uncertainties relate to potential external shocks—such as the pandemic-related lockdowns in China—and the fate of small carriers that are seeing weaker spot rates and soaring fuel costs. A flood of those drivers back to the security of working directly for larger carriers might accelerate a market normalization, although equipment availability could limit a downside on utilization and rates.”