FTR’s Trucking Conditions Index for May showed minuscule m/m improvement to a reading of -3.75 from -3.88 in April, indicating a mildly negative environment for carriers. Falling fuel prices and slightly less unfavorable rates and utilization offset weaker volume in May as market conditions remain weak but stable.
FTR’s TCI forecast is negative through the middle of 2024. In general, weak rates and elevated financing costs are expected to offset tiny incremental improvements in freight demand and utilization.
Avery Vise, FTR’s vice president of trucking, commented, “If there’s any good news for trucking companies, it’s that conditions are not really deteriorating. Freight volume is largely stable, and driver capacity appears to be falling steadily but slowly. However, this market climate could stick around well into 2024, resulting in weak freight rates and low margins. Solid financial management has never been more critical as trucking companies cannot count on a rising tide lifting all boats anytime soon.”
Details of the May TCI are found in the July 2023 issue of FTR’s Trucking Update, published June 30. The July edition explores whether recent strength in the automotive and housing markets could buffer anticipated declines in consumption. Beyond the TCI and additional commentary, the Trucking Update includes data and analysis on load volumes, the capacity environment, rates, and the economy.
The TCI tracks the changes representing five major conditions in the U.S. truck market. These conditions are freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. The individual metrics are combined into a single index indicating the industry’s overall health. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.