Weak Q1 Economics Pull FTR’s Trucking Conditions Index Down in March


FTR’s Trucking Conditions Index (TCI) for March dropped nearly 50% from the previous month to a reading of 4.22, and is now at its lowest level since 2011. The index was negatively impacted by weak Q1 economics, and downside risks could prevent any real upward movement until late in the year. Truck loadings, and the freight market in general, are now consistent with a slow growth environment. More concerning is the fact that further falls are possible. Regulations that will reduce truckers productivity could move the TCI higher in 2017 and 2018, as capacity becomes constrained due to the new rules affecting the industry.

Details of the March TCI are found in the May issue of FTR’s Trucking Update, published April 29, 2016. The ‘Notes by the Dashboard Light’ commentary in the current issue gives an overview of how rising inventory levels are likely to impact truck demand. Along with the TCI and ‘Notes by the Dashboard Light,’ Trucking Update includes data and analysis on load volumes, the capacity environment, rates, costs, and the truck driver situation.

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Jonathan Starks, Chief Operating Officer at FTR, commented, “The freight markets have slowed significantly over the last year with March volumes just 1.5% above year ago levels. On a seasonally-adjusted basis, volumes were lower in March than what was seen in July of last year. The market has essentially moved sideways for more than half a year. The good news is that manufacturing looks to be growing again, and the consumer hasn’t stopped spending. The bad news is that manufacturing output will remain weak during most of 2016, and consumer spending hasn’t grown strong enough to make up the difference. Add in the serious inventory glut that has persisted since early 2015, and there is little to call for a significant change in the carriers operating environment for 2016. One surprise has been the sharply negative environment for contract rates in early 2016.

"This has occurred at the same time that spot market rates have finally stabilized. I believe it is a delayed response to the 2015 easing of capacity combined with rising fuel prices that has hurt the contract market this year. Weak rate growth will persist but not at the negative level that we are currently seeing, especially once we hit 2017 and the regulatory pressures begin to increase.”

Trucking Update, published monthly, is part of FTR’s Freight Focus and reports data that directly impacts the activity and profitability of truck fleets. As part of Trucking Update, FTR forecasts expected trends in this data and the probable short and long term consequences. For more information on how to subscribe to Trucking Update, or other publications within FTR's Freight Focus, send an email to [email protected]  or call (888) 988-1699 ext. 1.

For more than two decades, FTR has been the thought leader in freight transportation forecasting in North America. The company’s national award-winning forecasters collect and analyze all data likely to impact freight movement, issuing consistently reliable reports for trucking, rail, and intermodal transportation as well as providing demand analysis for commercial vehicle and railcar. FTR’s forecasting and specially designed reports have resulted in advanced planning and cost-savings for companies throughout the transportation sector.
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