Rising fuel costs drive down FTR’s Trucking Conditions Index

While certain elements of the trucking market remain on solid footing, the ongoing surge in diesel gasoline prices drove down the most recent reading of the Trucking Conditions Index (TCI), which was recently issued by freight transportation consultancy FTR.

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.

The December 2020 TCI, which is the most recent month for which data is available, fell to 8.51, following a 10.46 November reading. The firm explained that the components of the index focused on freight demand, rates, and capacity utilization saw higher levels, from November to December, but the fuel cost component saw its largest negative change going back more than three years.

FTR said that it expects the TCI to be in the high positive single digits over the course of 2021.

“Although the broader economy hit some soft spots as 2020 closed, freight demand remains robust,” said FTR Vice President of Trucking Avery Vise in a statement. “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.”