Trucking Conditions Index For August Declines But Remains In Strong Positive Territory
Although FTR’s August Trucking Conditions Index at a reading of 10.24 fell from the high reading of the previous month, it continues to reflect a very positive carrier environment. The moderation in the August TCI reflects some freight rate stabilization and continued incremental capacity additions. Freight demand remains quite strong and the TCI is forecast to hold up at the current level for the next year or more.
Avery Vise, vice president of trucking research commented, “The August TCI reading is the lowest of 2018 so far, but prior to this year the TCI had not been higher than 10.24 since December 2015. In other words, the moderation we see in trucking conditions really just highlights how phenomenal the first half of 2018 was. Based on our current forecast, trucking conditions will remain positive at least through 2019.”
The Trucking Conditions Index tracks the changes representing five major conditions in the U.S. truck market. These conditions are: freight volumes, freight rates, fleet capacity, fuel price, and financing. The individual metrics are combined into a single index that tracks the market conditions that influence fleet behaviour. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem, while readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment, and double-digit readings (both up or down) are warning signs for significant operating changes.