BLOOMINGTON, Ind. — FTR’s Trucking Conditions Index (TCI) rebounded in January to a +10.37 reading, roughly matching the November index reading. The December TCI was +8.51. Stronger freight rates and volume more than offset higher fuel costs in January, according to FTR. Rising fuel costs will have a more negative impact on the February TCI, but analysts believe the index will remain strong 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, vice president of trucking for FTR. “With stimulus from Washington, extraordinarily lean inventories, and a fading pandemic, solid freight demand is practically baked in.
FTR’s latest forecast calls for stronger freight demand through 2021, and analysts expect positive trucking conditions through 2021 even if the current tight driver market loosens somewhat as the pandemic fades.
“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,” Vise noted, adding that the strong freight volume “suggests that the principal issue is the supply of drivers, not demand for them.”
The TCI tracks changes representing five major conditions in the U.S. truck market — freight volumes, freight rates, fleet capacity, fuel price and financing. The individual metrics are combined into a single index that reflects the industry’s overall health. A positive score is good, while a negative score represents bad conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.
Details of the January TCI can be found in the March 2021 issue of FTR’s Trucking Update, published February 26.
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