FTR’s Trucking Conditions Index (TCI) strengthened marginally in February despite a sizeable increase in fuel costs as freight rates were strong and freight demand improved.  The TCI increased to 12.06 from 11.46 in January. The record surge in diesel prices during March almost certainly will send the TCI measure into negative territory for the first time since May 2020 once that data is finalized. The TCI is forecast to recover to positive territory in April and beyond, but signals of potentially weaker demand and rates than currently forecast could temper that outlook, especially if fuel costs remain volatile.

Avery Vise, FTR’s vice president of trucking, commented, “The truck freight market has entered the inevitable period where conditions for carriers are transitioning from uniformly strong to those that will be more variable from month to month and from segment to segment. Uncertainty is high on both the demand and supply sides. Consumers generally remain strong financially, but prices are soaring, which undercuts buying power. Demand in the industrial sector remains high, but the supply chain still meters output, and the durability of that demand is not a given. Meanwhile, the implications of a spot market that is starting to normalize are unclear owing to the unprecedented shift of volume and capacity into the spot market since the rebound in mid-2020. It is premature to declare doom and gloom for carriers or major relief for shippers, but both should be weighing threats and opportunities.”

Details of the February TCI are found in the April 2022 issue of FTR’s Trucking Update, published March 31. The April edition also includes commentary on how weak van market spot rates as diesel prices surge could spark a swing of capacity back to larger carriers.

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 price, and financing. 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.