FTR’s Trucking Conditions Index (TCI) for February hit its highest level in 16 months, improving to 11.23 from January's 10.37.
Strong capacity utilization and freight rates along with stable freight volume have offset surging diesel fuel prices, which eased in late March after weeks of several months of increases, FTR noted.
"You could hardly devise better market conditions for trucking companies as demand is robust in both the consumer and industrial sectors and lingering labor-related challenges due to the pandemic are keeping a lid on capacity," said FTR’s Vice President of Trucking Avery Vise.
FTR's near-term outlook for trucking is strong with the TCI expected to deliver double-digit positive readings through the quarter and to remain in positive territory through 2022.
"We do not expect any noticeable easing in this environment until this fall, and even when that occurs, we do not anticipate that conditions will stabilize as quickly as they did in late 2018 and 2019," Vise said. "The outlook is not without risks, including shortages and disruptions in the supply chain. However, even those risks arguably have an upside by potentially bolstering freight demand over a longer period.”
Supply chain constraints are a real headwind. Many truck OEMs are already struggling to keep up with demand as a global shortage of semiconductors and supply limitations of various other components have crimped production plans for Volvo, Mack, Kenworth and Peterbilt to-date – woes that are unlikely to be fully resolved in the coming few months.
Note: FTR's TCI tracks the changes representing five major conditions in the U.S. truck market (freight volumes, freight rates, fleet capacity, fuel price, and financing) and the individual metrics are combined into a single index indicating the industry’s overall health. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.