Trucking companies face “modestly unfavorable” outlook heading into 2024
FTR report shows freight demand is just strong enough to keep most drivers employed but not fully utilized.
Market conditions are expected to remain “at least modestly unfavorable” for trucking companies into 2024, following a report on March freight statistics from the transportation analyst firm FTR.
FTR’s Trucking Conditions Index (TCI) for March reflected “persistent unfavorable” conditions for carriers with a reading of -5.83 for the month, showing a decrease from -5.17 in February. The slump was triggered by challenging financing costs and a more negative rate environment as spot rates continued to deteriorate, that were only partially offset by lower fuel costs and slightly stronger utilization rates.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index, the number indicates the industry’s overall health, with a positive score representing good, optimistic conditions and a negative score showing the opposite.
“The data that drives our forecasting model still suggests that market conditions for trucking companies are at or near bottom, but the recovery looks fairly shallow – certainly compared to recent markets,” Avery Vise, FTR’s vice president of trucking, said in a release.
“We have yet to see clear indications that enough drivers are exiting the market to set the stage for a capacity-driven rebound. Although many very small carriers are failing, so far larger carriers have absorbed that driver capacity. Freight demand appears just strong enough to keep most drivers employed but not strong enough to keep them fully utilized,” Vise said.