FTR’s Trucking Conditions Index remains on solid footing to start 2021

While its previous edition was beset by the ongoing run-up in diesel prices, the new edition of the Trucking Conditions Index (TCI), which was issued this week by freight transportation consultancy FTR, showed positive signs of improvement.

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.

The January 2021 TCI, which is the most recent month for which data is available, came in at 10.37, topping December’s 8.51 reading, nearly matching November 2020’s 10.46 reading. FTR attributed the gain to stronger freight rates and volumes more than offsetting higher fuel costs in January. Looking ahead, FTR said that rising fuel costs will have a more negative impact on the February TCI, with the caveat that the TCI is expected to remain in solid territory because freight market dynamics are solidly in carriers’ favor.

“Market conditions are close to the best ever for trucking companies, and they should remain that way at least through this year,” said Avery Vise, FTR’s vice president of trucking, in a statement. “With stimulus from Washington, extraordinarily lean inventories, and a fading pandemic, solid freight demand is practically baked in. The bigger risk to good times is that driver capacity comes back too strongly as labor participation rebounds, but with the pipeline of new drivers constricted for the past year, that risk seems low. Trucking’s weak payroll jobs numbers for January and February even as freight volume is strong suggests that the principal issue is the supply of drivers, not demand for them.”