Happy Friday! Who’s ready for more data telling us exactly how bad things got in April?
This week, FTR Transportation Research released its latest Trucking Conditions Index (TCI), and thanks to the coronavirus pandemic, it was the lowest reading on record. April’s TCI reading came in at -28.66, plummeting from its March reading of -8.69. The worst reading prior to April occurred in September 2008, at -16.08.
The TCI tracks freight volumes, freight rates, fleet capacity, fuel price, and financing in the truck market. These indicators are combined into one index that measures the health of trucking. According to FTR, demand, utilization, and freight rates were all ‘extremely negative.’ The one bright spot was the price of fuel.
According to FTR, readings above zero indicate an adequate trucking environment, and anything above ten means things are looking good for truckers. When the TCI falls below zero, not so much.
FTR analysts expect conditions to improve after April, but remain negative well into 2021. In May, when the March TCI was released, FTR announced that, ‘FTR’s Trucking Conditions Index reading for March, at -8.69, is just the start of negative readings that almost certainly will lead to the worst quarter (Q2 2020) for the segment on record…We do not anticipate any positive TCI readings until around the middle of 2021, although the pace of economic recovery remains uncertain.’
In other words, trucking conditions are bad, and will likely remain so for the foreseeable future. Vice President of Trucking, Avery Vise noted, ‘Spot market load volumes have recovered well since bottoming out in mid-April, although the recovery seems to have stalled out a bit. The unprecedented depth and speed of the contraction and the severity of disruption in supply chains and freight networks will make it difficult to assess in the short run whether higher volumes are merely temporary or part of a sustained rebound. The critical question is what happens once consumers and businesses exhaust the trillions of dollars that Washington has pumped into the economy to offset the pandemic’s financial consequences. All that we can be sure about is that market conditions will not be as bad as they were in April.’