Following a recovery from falling into negative territory, the new edition of the Trucking Conditions Index (TCI), which was recently issued by freight transportation consultancy FTR, fell back into the red.
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 May, the most recent month for which data is available, the TCI came in at -0.3, on the heels of a 3.21 April reading. April was preceded a -7.38 March reading, the first negative TCI reading going back to May 2020. January and February came in at 11.46 and 12.06, respectively, driven by what FTR, at the time, called a “sizable increase in fuel costs as freight rates were strong and freight demand improved.”
FTR attributed May’s reading to sharp diesel increases, which, in turn, slightly offset improved freight market conditions for carriers. And it also observed that freight demand, capacity utilization, and freight rates were slightly stronger in May but together were unable to diminish the negative impact of then-record diesel prices during the month.
What’s more, it said that the outlook is for conditions to continue close to neutral territory, with index readings in either low positive or low negative figures from month to month.
“Upward pressures on trucking conditions are largely history at this point,” said Avery Vise, FTR’s vice president of trucking, in a statement. “The question now is how high and strong of a floor remains. Employment data from recent months suggest that drivers are readily available for larger carriers, although much of that growth surely is coming at the expense of very small carriers that are failing due to record diesel prices—at least until recent weeks—and normalizing spot rates. Meanwhile, despite soaring inflation and other worries, consumer spending and industrial production have remained surprisingly healthy. Driver capacity has faded as a wild card as the resilience of freight demand has taken its place.”
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