The new edition of the Trucking Conditions Index (TCI), which was recently issued by freight transportation consultancy FTR, saw some signs of improvement but again remaining short of growth.
According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above 10 indicating that volumes, prices and margin are in a good range for carriers.
For January, the most recent month for which data is available, the TCI reading, at -1.41 moved in the right direction, well ahead of December’s -4.3. November’s TCI reading was -1.35, representing an improvement compared to November and October’s respective -6.07 and -8.97 readings. Which were preceded by August’s -12.54 reading (its lowest reading going back to November 2022), which was preceded by July’s -5.34 reading and June’s -6.29 reading.
FTR explained that January’s TCI reading represented what it called a “less challenging financial environment for carriers.” And it explained that freight rates and financing costs were not as negative as they had been during the prior month, although fuel costs were not as favorable as they had been, either. The firm said that the outlook for trucking conditions has improved but remains in negative territory for most of the year.
“Our forecast for freight volume is modestly stronger, but excess capacity continues to temper our expectations for a market revival,” said Avery Vise, FTR’s vice president of trucking, in a statement. “Absent a triggering event like a surge in fuel prices, for example, we see a continued gradual drain of capacity that will not begin to shift market fundamentals for months. The eventual rebound also might be uneven as the first signs of improvement could slow the exit of excess capacity and delay a sustained recovery.”
At the SMC3 JumpStart conference in late January, Vise said for basically more than a year, and in looking ahead, FTR sees freight as being really sluggish through basically the rest of this year,” he said.
“There could be a pivot, yes, and there will be an inflection, but not really much of one. By the time when we get to the end of next year, that'll be a fairly normal environment. Nothing really to get excited about necessarily, but certainly one that is livable.”
As for the reasons behind that forecast, he noted that it goes back to a few different factors.
Consumer spending is strong, he said, and while retail sales have been “quite good” over the past few months, Vise said that its growth period is basically over.