FTR’s September Trucking Conditions Index Begins Expected Upward Trend

A coming spike in the index will primarily be related to Hurricane recovery efforts. Going forward, the strong demand for truck freight should keep this index in solidly positive territory through 2018.

FTR
Ftr September Trucking Conditions Index

FTR’s Trucking Conditions Index (TCI) for September, at a reading of 3.5, increased more than two points from the previous month. A coming spike in the index will primarily be related to Hurricane recovery efforts. Going forward, the strong demand for truck freight should keep this index in solidly positive territory through 2018. Although this recovery’s economic growth has been the weakest on record, trucking has grown at a better than 3% clip - consistent with stronger economics. If the economy maintains its current strength, FTR expects that the index has a good chance for upside potential in the coming months.

Jonathan Starks, Chief Operating Officer at FTR, comments, “The trucking market is showing multiple signs of strengthening. From surging order activity for new Class 8 trucks to spot market freight rates that hit 30% increases versus last year, trucking companies are displaying signs of improving conditions. Recent weakness in the TCI stems from two conditions that are not expected to last. First was the surge in diesel pricing that accompanied the Hurricanes. While diesel prices have not come back down, they have slowed their upward trajectory--stable fuel prices are a long-term benefit to trucking, and surges upward are difficult to deal with since truckers don’t get paid for that higher priced fuel until the next load or the next contract. Second, and more importantly, contract pricing has finally started to show signs of awakening following nearly 6 months of strong spot price increases and the weather-fueled surges of recent months. While we have seen a moderation in the spot market environment over the last month, rates continue to be up over 20%, and capacity continues to remain tight.”

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