ANALYSIS: Trucking Environment Improves But “Good Ole Days” Now In The Rear View

Little Rock, Arkansas – A new report by FTR Transportation Intelligence is giving trucking stakeholders continued confidence in the environment for trucking companies, but FTR is cautioning not to overestimate the results.

FTR’s Trucking Conditions Index (TCI) bounced back from its recent swoon spiking in December to a reading of 11.46.  FTR says the sharply improved December reading is “a result of strong m/m growth in volumes along with a favorable fuel environment.”

However, FTR forecasts that this level will not be sustained in 2019 with readings falling back to the mid-single digit positive readings in January and moving steadily to more neutral conditions likely by Q4.

Avery Vise, FTR’s VP of Trucking, commented on the report. “While we don’t anticipate truly negative trucking conditions at any point in 2019, we think we have seen the end in this cycle of the abnormally strong pro-carrier conditions that had held sway from the days following the 2017 hurricanes through the second quarter of 2018,” Vise said. “December 2018 probably was just one last taste of the good ol’ days of six months ago.”


ACT Research President and Senior Analyst, Kenny Vieth, also expressed some caution this week about the mid-term outlook of the U.S. economy. “While the outlook has less of an orange tinge, sufficient caution flags remain to keep the yellow light burning regarding the near to mid-term economic outlook,” Vieth said.

He elaborated, “While we’ve seen improvement in petroleum prices, equity valuations, and a monetary policy pause, we remain cautious regarding indicators like a flat yield curve, quantitative tightening, potential fallout from tariffs and trade wars, as well as the global economic slowdown.”

This new warning comes on the heels of an FTR preliminary North American Class 8 orders report for January 2019 showing a 26% M/M drop. The order total was the lowest since October 2016 at 15,600 units, while ACT Research tallied the preliminary number at 15,800.


About FTR’s TCI:

The Trucking Conditions Index tracks the changes representing five major conditions in the U.S. truck market. These conditions are: 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. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem, while readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment, and double-digit readings (both up or down) are warning signs for significant operating changes.

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