Despite a drop from historically tight market capacity in the first quarter, carriers continue to enjoy prime business conditions, as a drop in diesel prices helped truckers enjoy a better market in November than the month before, according to a monthly index of trucking conditions generated by the industry consulting firm FTR.
Bloomington, Ind.-based FTR's Trucking Conditions Index (TCI) for November rebounded by more than two and a half points from October to a reading of 5.84, a figure basically unchanged from a year ago despite recent volatility. In FTR's system, a positive TCI number indicates that truckers can operate profitably, in part because the demand for their capacity outweighs supply. In contrast, a negative index number means market conditions for good for shippers, as they try to keep transportation costs down.
Looking further down the road, FTR predicts more stable TCI readings in early 2019, tapering off to a near neutral reading by mid-year, which would indicate that supply and demand are roughly in balance.
"We would anticipate that trucking conditions will be relatively stable through the first quarter of 2019 and perhaps a bit beyond that, but the second half of the year should be noticeably weaker due to factors such as lower active truck utilization and increased cost of capital," Avery Vise, FTR's vice president of trucking, said in a release. "At this point we expect trucking conditions still to be slightly positive by the end of the year, although the downside risks clearly seem greater than the upside."
According to FTR, its TCI tracks the changes representing five major conditions in the U.S. truck market, including: freight volumes, freight rates, fleet capacity, fuel price, and financing. The individual metrics are combined into a single index that tracks the market conditions that influence fleet behavior.
As recently as February, the TCI had hit an all-time high of 15.41 and sustained that level with a 14.04 in July, but the measure dropped sharply to 3.17 in October.