Trucking Conditions Worsen In January And Predicted To Be “High Point” For 2019
Little Rock, Arkansas – Conditions for trucking companies worsened in January after bouncing back in December ’18; and now, analysts are predicting the downslide to continue for most of the rest of the year.
After a spike to a 11.44 positive reading in December, FTR’s Trucking Conditions Index (TCI) fell back to 5.79 in January. Higher costs of capital along with lower freight demand and capacity utilization drove the index downward according to FTR.
FTR freight analysts are now even predicting conditions will continue to devolve to possibly neutral territory for carriers for the remainder of 2019. Avery Vise, FTR’s vice president of trucking, commented, “Trucking conditions in January were not the outlier that December conditions were, but the industry still enjoyed much lower diesel costs than had been the case for most of 2018.”
Vise believes January will most likely be the best month for trucking conditions in all of 2019. “With diesel prices now rising and capacity utilization and freight rates easing, we would expect January to represent the high point for trucking conditions in 2019,” he said.
According to a recent report from ACT Research (ACT), a freight recession in 2019 is not out of the question. “While there is a very low probability and no expectation of an economy-wide recession in 2019, freight-related data points have been sufficiently bad in breadth and duration to note that a freight recession is possible, although unlikely,” said Kenny Vieth, ACT’s President and Senior Analyst.
Vieth noted that though a freight recession is “unlikely” he expects the rate recession to continue due to an imbalance in the truck supply-freight demand. “Slower freight growth, an easing of driver supply constraints, the resumption of the long-run freight productivity trend, and strong Class 8 tractor fleet growth will increasingly pressure rates and by extension, trucker profitability in 2019,” Vieth predicted.