FTR’s Trucking Conditions Index reached its strongest reading in four years, but it may not last, the industry forecaster warns, as higher diesel prices are not yet fully factored in.
And spot market rates continue to surge, but those too are going to be partially offset by soaring diesel prices.
TCI reaches four-year high
Trucking conditions improved in February to a reading of 10.2, the highest level seen by the FTR Trucking Conditions Index in four years.
Stronger freight rates drove the gains, however higher fuel prices could drag that reading down in March, FTR predicts. The TCI combines five metrics that affect trucking profitability: freight volumes; freight rates; fleet capacity; fuel prices; and financing costs.
“Extreme volatility in fuel prices – especially with the just-announced ceasefire in the Middle East – and uncertainty over how the spot market will respond to falling diesel prices make the near-term truck freight market far more difficult to forecast than the longer-term outlook, which remains solidly favorable for carriers,” said Avery Vise, FTR’s vice president, trucking.
“The freight market’s response this year to weather and diesel prices confirms how much capacity has tightened. As we explored in our latest update for clients, the real question is whether freight volume will support an acceleration of freight rates or whether carriers will merely hold recent gains.”
Spot rates continue to rip
Truckstop.com reports higher rates for the week ended April 3, mostly due to gains for reefer and flatdeck haulers. The total market rates is at its highest level since June 2022, even when excluding the portion of the gains influenced by diesel prices.
But dry van and reefer rates, when adjusted for fuel costs, are below levels seen in late December and in the wake of January storms.
Total load volumes dropped 6.4% on the week after reaching their highest level since June 2022 in just the previous week. Truckstop.com suggests this could be due to the Good Friday holiday.
Load postings were still nearly 21% higher than the same week the year prior.
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