The Trucking Conditions Index (TCI), published monthly by the freight transportation consultancy firm FTR, tracks the changes representing six major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fleet bankruptcies, fuel price and financing. The TCI is focused primarily on contract markets, not spot markets; however, the markets do interrelate.
As reported by Jeff Berman in Logistics Management, the most recent TCI, reported for the month of August, was a modest 1.41; this is a sharp drop from July’s 5.75 and the figure of 6.76 from the previous year. Although the index reading was substantially down, FTR cautions that the August number “is not wholly reflective of the current environment for truckers…[and it] reflects tightening conditions for hauling capacity.” FTR states that a positive TCI reading represents an adequate trucking environment, while readings above ten indicate prices, margin and volumes are in a range that is better for carriers. The August index of 1.41 showed only a “modestly positive” reading for market fleets, possibly signaling big changes ahead and a continued steady increase in spot market rates.
FTR COO Jonathan Starks points out that the increase did not happen all at once. Berman quotes Starks as saying, “… spot markets have actually been moving in this direction for the past year. Load activity was rising, truck availability was falling, and rates were already up over 20 percent year over year before the storms hit. Spot market rates are a leading indicator; and, although there is a lag, contract markets are starting to follow suit. Shippers are now taking notice and are getting worried about dealing with double-digit rate increases as we head towards bid season.”