FTR’s Trucking Conditions Index declined in October

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Trucking Conditions

FTR Associates on Friday, Dec. 2, announced that its Trucking Conditions Index declined to a reading of 3.4 in October. The environment for truckers as measured by the TCI softened primarily due to further delay in the issuance of revised hours-of-service regulations, which is affecting the near-term outlook for capacity and therefore the current ability of carriers to gain rate increases. The TCI is projected to increase as capacity conditions tighten, but the peak has been moved back from April to October of next year, reflecting the regulatory delay.

The Trucking Conditions Index is a compilation of factors affecting trucking companies and has remained in positive territory for the past eight months. Any reading above zero indicates an adequate trucking environment, with readings above 10 a sign that volumes, prices and margin are in a good range for trucking companies.

“There was a considerable drop of six points in the TCI in October,” says Larry Gross, FTR senior consultant. “Some of this drop was a result of changes in our methodology for calculating the TCI as we continue to refine this measurement.”

Gross says that although October’s TCI reflected the rather subdued nature of the fall peak, the recent strong start to the holiday shopping season combined with retailers’ lean inventories should lead the TCI to resume climbing even in the absence of near-term changes in federal regulations. “The addition of any such changes, now expected to be announced by yearend, will exacerbate the trend,” he says.