FTR’s Trucking Conditions Index (TCI) for February reflects an environment for carriers that has never been better. The current reading of 15.41 is the highest since FTR began tracking the conditions index in 1992. The index jumped four points from the January reading and could improve still more through (at least) Q2, fueled by an even stronger economy. The first quarter of the year is typically a soft period for freight growth, but not in 2018. FTR’s Truck Loading Index, which is a major component of the TCI, should see growth of 4-6% year over year (y/y) into 2019. Rate stabilization and labor/equipment costs that soften carrier margins could moderate the TCI reading in the second half of the year.
Jonathan Starks, Chief Operating Officer at FTR, comments, “For carriers, there is a feeling of ‘Let the Good Times Roll,’ and the data is backing that up. We are approaching record level spot rates, freight demand remains elevated, and the economy continues to grow at a good pace. If there is any frustration, it is having to turn away loads due to a shortage of drivers. We have had record levels of trucks and trailers ordered in the first quarter of 2018 and, as that equipment is delivered, we may see some of the capacity pressures relieved. More likely is that freight demand will gradually slow over the course of the year. This can be a challenging time for carriers as they try to balance the short-term and long-term needs of the business. This freight environment won’t stay around forever, and both carriers and shippers will be striving to balance those competing requirements.”