FTR reports highest Trucking Conditions Index reading since early 2004

Trucking conditions for the month of July represented the strongest for the sector going back to early 2004, according to the most recent edition of the Trucking Conditions Index (TCI) from freight transportation consultancy FTR.

The TCI reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital and freight.

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 July, the most recent month for which data is available, the TCI hit 14.04, topping May and June at 11.4 and 11.18, respectively.

With the current level of the TCI, FTR said it is likely the index has peaked, with subsequent moderation likely over the rest of 2018.

It noted that key freight generators-like manufacturing, construction, and retail sales-are still strong and are expected to remain positive in the coming months, coupled with its forecast risk being on the upside if holiday sales outpace expectations.

“Carriers might not see stronger conditions in the current cycle, but they shouldn’t lose too much sleep over it,” said Avery Vise, FTR vice president of trucking, in a statement. “We expect the TCI to remain in double-digit territory into 2019. With manufacturing and construction hot and the labor market tight, it would be very difficult for capacity growth to outstrip freight demand for quite some time.”