Trucking Conditions Index Reflects Strong Pro-Carrier Environment
With the exception of a higher reading in February of this year, FTR’s Trucking Conditions Index for July, at a reading of 14.04, reflects the strongest conditions the industry has seen since early 2004.
This current growth cycle is stronger in duration than the 2004 period. FTR predicts that the TCI has peaked and will moderate modestly for the rest of the year. Key freight generators – manufacturing, construction, and retail sales – remain strong, with a positive outlook for the coming months. The forecast risk in the near term is on the upside if holiday retail sales outpace expectations.
Avery Vise, vice president of trucking research, commented “Carriers might not see stronger conditions in the current cycle, but they shouldn’t lose too much sleep over it. We expect the TCI to remain in double-digit territory into 2019. With manufacturing and construction hot and the labor market tight, it would be very difficult for capacity growth to outstrip freight demand for quite some time.”
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. Environment