FTR’s Trucking Conditions Index falls to lowest level ever
As was anticipated last month, the most recent edition of the Trucking Conditions Index (TCI), which was issued this week by freight transportation consultancy FTR, turned in its lowest reading ever, due, to the COVID-19 pandemic.
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.
The April TCI (the most recent month for which data is available) came in at -28.66, topping the previous low of -16.08 recorded in September 2008, and far outpacing March’s -8.69.
When the March TCI was issued last month, FTR said that reading likely represented the beginning of negative readings, which will likely lead to the worst quarter on record.
FTR said that the lone positive factor within the April TCI was the cost of fuel, while demand, utilization, and rates were viewed as “extremely negative.”
What’s more, FTR said that April represented the bottom for the majority of freight-related indicators, which the firm said is confirmed by an uptick by an uptick in May payroll employment, as the pace of the economic recovery remains uncertain. And FTR added that it expects post-April trucking conditions to improve sharply while remaining in negative territory through early 2021. But that comes with a caveat, as FTR noted it is prepared for significant revisions in the outlook as it sees more data on demand, capacity, and utilization.
“Spot market load volumes have recovered well since bottoming out in mid-April, although the recovery seems to have stalled out a bit,” said Avery Vise, FRT vice president of trucking, in a statement. “The unprecedented depth and speed of the contraction and the severity of disruption in supply chains and freight networks will make it difficult to assess in the short run whether higher volumes are merely temporary or part of a sustained rebound. The critical question is what happens once consumers and businesses exhaust the trillions of dollars that Washington has pumped into the economy to offset the pandemic’s financial consequences. All that we can be sure about is that market conditions will not be as bad as they were in April.”
