FTR’s Trucking Conditions Index weakens, due to fuel price gains

The new edition of the Trucking Conditions Index (TCI), which issued this week by freight transportation consultancy FTR, took a step back, due largely to gains in fuel prices.

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 February, the most recent month for which data is available, the TCI reading came in a -5.31, down from January’s -1.41, which was ahead of December’s -4.3. November’s TCI reading was -1.35, representing an improvement compared to November and October’s respective -6.07 and -8.97 readings. Which were preceded by August’s -12.54 reading (its lowest reading going back to November 2022), which was preceded by July’s -5.34 reading and June’s -6.29 reading.

FTR cited a sharp increase in diesel prices as the main driver in what it called the “deterioration” in market conditions for carriers. And it added that coupled with the recent increase in fuel prices, fuel costs could have a near-term negative impact on the TCI, but coming with the caveat that freight market dynamics are expected to head towards a less-challenging environment for carriers.

“We forecast market conditions for carriers as measured by the TCI to remain negative but to steadily improve through the third quarter,” said Avery Vise, FTR’s vice president of trucking, in a statement. “Trucking companies should see more favorable conditions in the fourth quarter and in 2025, although risks to a recovery are still significant. The industrial sector shows signs of improvement, and consumption has been solid. However, inflation and interest rates are still a concern. The biggest issue remains the imbalance between capacity and demand, which continues to depress utilization. Diesel prices are a wild card as an escalation might push out more operations that are struggling financially.”

At the SMC3 JumpStart conference earlier this year, Vise said for basically more than a year, and in looking ahead, FTR sees freight as being really sluggish through basically the rest of this year.

“There could be a pivot, yes, and there will be an inflection, but not really much of one. By the time when we get to the end of next year, that'll be a fairly normal environment. Nothing really to get excited about necessarily, but certainly one that is livable.”

As for the reasons behind that forecast, he noted that it goes back to a few different factors.

Consumer spending is strong, he said, and while retail sales have been “quite good” over the past few months, Vise said that its growth period is basically over.