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FTR’s Trucking Conditions Index for March Falls in Spite of Positive Economic Environment

05.16.17 | FTR

 
FTR’s Trucking Conditions Index (TCI) for March fell back to a reading of 2.97 after an upturn in February. However, as detailed in the May issue of the Trucking Update, FTR sees the recent steady improvement in spot rates as an indication that a market-wide move to capacity tightness is on the way with a correlating upswing in the index throughout 2017 and into 2018. FTR remains confident in the freight market for 2017, as we started the year off with strong growth in Q1. Their forecast has moderated somewhat for the regulatory headwinds affecting trucking, but still expect them to have significant effect toward the end of 2017 and for most of 2018.

Details of the March TCI are found in the May issue of FTR’s Trucking Update, published April 28, 2017. The ‘Notes by the Dashboard Light’ section in the current issue discusses disconnects and risks to the most likely outcomes of factors affecting trucking. Along with the TCI and ‘Notes by the Dashboard Light,’ the Trucking Update includes data and analysis on load volumes, the capacity environment, rates, costs, and the truck driver situation.

Click here to view the latest release and an interactive graph of the TCI >


Jonathan Starks, Chief Operating Officer at FTR, commented, “The TCI has settled into a positive, but not robust, level of market conditions over the last 12 months. The main reasons for the reduction in the March TCI stems from slightly weaker freight activity, reduced estimates of capacity tightness, and continued weaker-than-expected conditions for contract rates. Trucking conditions are likely to stay in this moderate range until late this year when the Electronic Logging Device (ELD) mandate comes into effect. Once you combine the productivity hit coming from full implementation of ELDs with continued freight growth and the capacity reductions that have already occurred, you get a market that is poised to see significant movement in rates.

“Recent spot market activity shows that some of these trends are already underway. Truckstop.com’s Market Demand Index (MDI), a measure of tightness in the freight-matching sector, is up nearly 100% compared to this time last year, and prices are now showing 5% y/y gains - enough of a move to convince us that the market is continuing to turn in a carriers direction.”

The Trucking Conditions Index tracks the changes representing six major conditions in the U.S. truck market. These conditions are: freight volumes, freight rates, fleet capacity, fleet bankruptcies, fuel price, and financing. The individual metrics are combined into a single index that tracks the market conditions that influence fleet behavior. A positive score represents good, optimistic conditions. 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….and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.
 

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Trucking Update, published monthly, is part of FTR’s Freight Focus and reports data that directly impacts the activity and profitability of truck fleets. As part of Trucking Update, FTR forecasts expected trends in this data and the probable short and long term consequences.
 
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About FTR
For more than two decades, FTR has been the thought leader in freight transportation forecasting in North America. The company’s national award-winning forecasters collect and analyze all data likely to impact freight movement, issuing consistently reliable reports for trucking, rail, and intermodal transportation as well as providing demand analysis for commercial vehicle and railcar. FTR’s forecasting and specially designed reports have resulted in advanced planning and cost-savings for companies throughout the transportation sector.