The Trucking Condition Index (TCI) for November 2017 dropped from October’s spike to a more sustainable reading, according to industry analyst FTR.
The Trucking Conditions Index (TCI) for November dropped to a more sustainable level with a 5.8 reading after October’s spike, according to industry analyst FTR.
FTR noted that while there was a “significant monthly decline in the index, conditions remained strong for carriers in November.”
The spike in October was short-lived, as expected, though 2018 contract rates are predicted to be better than November’s index reading, FTR said.
“With utilization levels fairly close to industry limits, further gains in the TCI are likely to come from either more significant pricing gains or additional freight growth. We are already seeing the pricing effects take hold with more substantial contract rate gains as spot market pricing surged after the hurricanes and during the holidays,” Jonathan Starks, chief operating officer at FTR said.
“Spot markets actually hit record high rates in the last week of 2017 and are starting 2018 at a significantly elevated level. As we move into 2018, the market is poised to see additional freight growth and further limits on capacity as ELDs are fully enforced beginning April 1,” Starks said. “The next critical time frame is Q2 when truckload activity ramps up and the full ELD enforcement hits. As the recent Polar Vortex weather demonstrated, any modest change in operating conditions can have an oversized impact on carriers and shippers as the industry operates with very limited (if any) excess capacity.”
The TCI tracks the changes representing five major conditions in the U.S. truck market, including freight volumes, freight rates, fleet capacity, fuel price and financing. The individual metrics are combined into a single index that tracks the market conditions that influence fleet behavior.
FTR: Trucking conditions stabilize in November 2017
