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FTR’s Trucking Conditions Index falls due to rising fuel costs

Feb. 10, 2021
While TCI declined compared to November, index components related to freight demand, rates, and capacity utilization were slightly stronger.

FTR’s Trucking Conditions Index (TCI) fell in December, but the blame lies squarely with higher diesel prices. The TCI declined to a reading of 8.51 from the 10.46 reading in November, but index components related to freight demand, rates, and capacity utilization were very slightly stronger. The fuel cost component of the index recorded its largest negative change in more than three years. FTR forecasts index readings in the high positive single digits through 2021.

Details of the December TCI are found in the February 2021 issue of FTR’s Trucking Update, published January 29. Additional commentary discusses how driver utilization in the for-hire segment compares to overall utilization. Beyond the TCI and additional commentary, the Trucking Update includes data and analysis on load volumes, the capacity environment, and rates. FTR also publishes ongoing publicly available analysis on the impact of COVID-19 on freight transportation at FTR’s COVID-19 intelligence.

“Although the broader economy hit some soft spots as 2020 closed, freight demand remains robust,” said Avery Vise, vice president of trucking, FTR. “Key metrics of the pandemic have improved sharply since the middle of January, and people are getting vaccines. The latest round of stimulus should at least maintain a floor on consumer spending, and the industrial sector continues to recover steadily. Even if freight demand were to stall, though, unusual constraints on the supply of drivers likely will prolong tight capacity. We expect a noticeable loosening as the pandemic fades and millions of Americans rejoin the labor pool. However, pandemic-related constraints on training and licensing of new commercial drivers have limited the driver pool and will impede a rapid return of capacity. Also, the drug and alcohol clearinghouse already has removed more than 45,000 drivers, and that number rises each day.”

The TCI tracks the changes representing five major conditions in the U.S. truck market. These conditions are freight volumes, freight rates, fleet capacity, fuel price, and financing. The individual metrics are combined into a single index indicating the industry’s overall health. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.