FTR’s Trucking Conditions Index falls but remains solid overall

While still very much stable, the most recent edition of the Trucking Conditions Index (TCI) released by freight transportation consultancy FTR last week is down compared to the very high levels that have been reached in previous months.

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 September, the most recent month for which data is available, the TCI reading was 4.58. This marks a drop-off from August’s 10.24 and July’s 14.04 (a 14-year high, as well as May and June at 11.4 and 11.18, respectively.

What’s more, FTR said this marks the first time the TCI reading has come in at single digits going back to December 2017, when it checked in at 9.2.

FTR said this is a reflection of some stabilization in freight rates and demand, adding that holiday shipping should keep volumes, freight rates, and capacity at a healthy rate and result in a rising TCI through the end of 2018, followed by what it called a “gradual softening” through most of 2019.

“September is a near-term outlier that mostly reflects an unusually rapid stabilization of the spot market due to capacity gains, ongoing completion of bid cycles, and continued adjustment to the electronic logging device environment,” said Avery Vise FTR vice president of trucking, in a statement. “A strong economy and labor market should make for a strong fourth quarter heading into a promising 2019, but it’s likely that trucking conditions have peaked in the current cycle.”