FTR Trucking Conditions Index falls again while showing some improvement

By LM Staff ·

October 24, 2022

The new edition of the Trucking Conditions Index (TCI), which was published late last week by freight transportation consultancy FTR, remained negative, for the fourth month, while showing some signs of improvement.

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 August, the most recent month for which data is available, the TCI reading was -0.25, marking an improvement over July and June, which came in at -0.7 and -3.36, respectively, with the improvements “almost exclusively” coming from decreasing diesel prices, said FTR.  What’s more, it added that the largest negative factor within the TCI was financing costs, with the Federal Reserve still battling inflation through what FTR called sharp increases in the federal funds rate. And it added that freight market dynamics were slightly weaker in August compared to July, with freight volume representing a very small positive contributor in the TCI’s calculation, with FTR seeing trucking market conditions in a period of moderate weakness through 2023, at a minimum.

“Although truck freight dynamics are softening broadly, smaller carriers likely will see a disproportionate negative impact in overall financial conditions due to sharp increases in financing costs and great volatility in diesel prices,” said Avery Vise, FTR’s vice president of trucking, in a statement. “Because small carriers are less likely to have reliable fuel surcharges in place, they typically feel the effects of changing diesel prices more profoundly than larger carriers do. That situation helped in July and August as diesel prices fell, but it will turn out to be a big negative in October at least. Small carriers also are less likely than larger ones to achieve comfortable financing terms for equipment and other needs for capital.”

October 24, 2022

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