FTR's Trucking Conditions Index for December fell to -4.31 from November's -1.35. However, even though it fell, FTR says December's reading indicated the least negative overall market conditions for carriers since May.
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FTR blames the decrease mostly on the higher cost of capital and a drop in freight rates.
"We finally see indications that larger carriers are no longer absorbing the bulk of driver capacity displaced by failing small carriers, suggesting a steady tightening of capacity that eventually could spark a turn in the market," Avery Vise, FTR's vice president of trucking, says. "If the recent upturn in diesel prices continues, the capacity drain among small carriers might accelerate. Even so, the industry will need stronger freight demand, and we still don't see any significant inflection in volume until at least the second half of this year."
The TCI tracks changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices and financing costs. These metrics are combined into a single index indicating overall health. A positive score signifies good, optimistic conditions. A negative score represents bad, pessimistic conditions. Readings near zero show a neutral operating environment. Double-digit readings in either direction show significant operating changes are likely.
