Trucking Conditions Index Falls After an Upturn in February
The FTR Trucking Conditions Index (TCI) fell in March after an upturn in February. The index is now at 2.97, but a recent improvement in spot rates indicates that the move to tighten capacity is coming along with an upswing in the index throughout this year and into next.
“The TCI has settled into a positive, but not robust, level of market conditions over the last 12 months,” said Jonathan Starks, chief operating officer at FTR. “The main reasons for the reduction in the March TCI stems from slightly weaker freight activity, reduced estimates of capacity tightness, and continued weaker-than-expected conditions for contract rates. Trucking conditions are likely to stay in this moderate range until late this year when the electronic logging device (ELD) mandate comes into effect. Once you combine the productivity hit coming from full implementation of ELDs with continued freight growth and the capacity reductions that have already occurred, you get a market that is poised to see significant movement in rates.
“Recent spot market activity shows that some of these trends are already underway. Truckstop.com’s Market Demand Index (MDI), a measure of tightness in the freight-matching sector, is up nearly 100 percent compared to this time last year, and prices are now showing 5 percent year-over-year gains, enough of a move to convince us that the market is continuing to turn in a carrier’s direction.”