In The News
FTR Trucking Conditions Index drops 50 percent to lowest level since 2011
BLOOMINGTON, Ind. — Transportation analyst firm FTR's Trucking Conditions Index (TCI) for March dropped nearly 50 percent 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 first-quarter economics, the company reported, adding that downside risks could prevent any real upward movement until late in the year.
"The freight markets have slowed significantly over the last year with March volumes just 1.5 percent above year-ago levels," said Jonathan Starks, chief operating officer at FTR. "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."
Truck loadings, and the freight market in general, are now consistent with a slow growth environment, an FTR news release stated, adding that further falls are possible. Regulations that will reduce productivity in the industry could move the TCI higher in 2017 and 2018 as capacity becomes constrained due to the new rules affecting the industry, the news release said.
"One surprise has been the sharply negative environment for contract rates in early 2016," said Starks. "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 have 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."
FTR forecasters collect and analyze all data likely to impact freight movement, issuing reports for trucking, rail and intermodal transportation, as well as providing demand analysis for commercial vehicles and railcars, the company stated.
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