FTR Trucking Conditions Index reaches highest level of 2015

The FTR Trucking Conditions Index in June rose 56%, reaching its highest level yet in 2015.

FTR JuneTruckingConditionsIndex 55cb8b34c8f0e

FTR’s Trucking Conditions Index (TCI) measure for June rose back up from May, jumping 56% to 7.66, hitting the highest level of 2015. Freight growth slowed during Q2, but rates continue to show growth and margins are still good. FTR expects regulatory conditions and a continued economic recovery to fuel an accelerating index during 2016.
The Key Takeaways:

  • Freight growth has slowed but is on track for the sixth straight year of annual gains.
  • Drops in fuel costs continue to be a positive for everyone involved - truckers, shippers and consumers. However, labor costs have shown substantial increases, which is keeping up the pressure for rising rates.
  • If fuel prices jump during 2016, just as capacity is tightening, it could cause a significant acceleration in rates.

Jonathan Starks, FTR’s Director of Transportation Analysis, comments, “It was a positive sign for trucking that the index rebounded in June. May was the lowest level in three years, but June was the best month so far in 2015. Continued declines in fuel prices during July and August should help to keep the index elevated as the industry prepares for the fall shipping season. The fall peak may not be as strong this year but the economy continues to chug along, and contract rates are still growing versus last year. The spot market has certainly slowed in 2015, relative to a very robust year in 2014. For the last week of July, the Market Demand Index (MDI) from was down over 50% from 2014. Spot rates are also down, but not nearly as dramatically, and half of the decline stems solely from lower fuel prices. The truck market is quite stable at the moment and seems likely to maintain that pace until we get into 2016.”