Trucking news and briefs for Friday, Oct. 20, 2023:
FTR's TCI reading for August was the worst since the beginning of the pandemic in April 2020.FTR
During the month, FTR’s Trucking Conditions Index fell to -12.54, down significantly from July’s already negative reading of -5.34. FTR said the sharp decline in conditions for carriers was due to significantly higher fuel prices and weaker freight volume.
The firm noted that the index’s reading implies the toughest overall market conditions for carriers since the beginning of the COVID-19 pandemic in April 2020, adding that “surges in fuel prices tend to hurt small operations disproportionately as they are less likely to benefit from fuel surcharges.”
FTR added that while the outlook is improved conditions, it doesn’t expect the index to turn consistently positive until late 2024.
“Market conditions for trucking companies look solidly negative through the first quarter of next year as we forecast no significant strengthening of capacity utilization or freight rates, and freight demand is stagnant,” said Avery Vise, FTR’s vice president of trucking. “A major question is whether consumer spending will remain as strong as it has been in the face of inflation, higher financing costs, and the resumption of debt service of student loan payments.”
Vise said freight demand isn’t likely to improve in the near-term, “so any near-term improvements in market conditions for carriers would likely come from a sharp drop in driver capacity.” Vise noted that while “small carriers continue to exit the market in high numbers,” those drivers are mostly being absorbed by larger carriers rather than leaving the industry altogether.
