Freight market dynamics are staying solidly in carriers’ favor despite rising fuel costs, according to an analysis of January trucking sector conditions by FTR Transportation Intelligence.
The news means that shippers will continue to see tight capacity, volume caps, and high costs, as they have seen in recent months.
FTR today said that its Trucking Conditions Index (TCI) rebounded in January to a +10.37 reading, roughly matching the November index reading and rebounding from a slight dip in December to +8.51. The index tracks changes in five conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel price, and financing. Combined into a single score, the number represents good, optimistic conditions when positive and bad, pessimistic conditions when negative.
Rising fuel costs will likely have a more negative impact on the February TCI, but overall, Bloomington, Indiana-based FTR forecasts strong freight demand through 2021, with positive trucking conditions throughout the year, even if the current tight driver market were to loosen somewhat as the pandemic fades.
“Market conditions are close to the best ever for trucking companies, and they should remain that way at least through this year. With stimulus from Washington, extraordinarily lean inventories, and a fading pandemic, solid freight demand is practically baked in,” Avery Vise, FTR’s vice president of trucking, said in a release.
“The bigger risk to good times is that driver capacity comes back too strongly as labor participation rebounds, but with the pipeline of new drivers constricted for the past year, that risk seems low. Trucking’s weak payroll jobs numbers for January and February even as freight volume is strong suggests that the principal issue is the supply of drivers, not demand for them,” Vise said.