Business conditions in the trucking sector improved in May, thanks to falling diesel prices and a freight rate environment that was less negative for carriers than has typically been the case over the past couple of years, according to a report from transportation analyst firm FTR.
FTR’s Trucking Conditions Index (TCI) rose in May to 2.24 from the -1.95 reading for April. Despite that data, the road to a complete recovery could be long, as FTR forecasted that May’s TCI likely is an outlier, and readings will return to negative territory through at least late this year.
“Trucking is in the initial stages of a recovery, although it might be months before market participants perceive much change,” Avery Vise, FTR’s vice president of trucking, said in a release. “A big piece of May’s positive TCI was lower fuel costs, but freight rates also were much less unfavorable for carriers than usual since the fourth quarter of 2022. We expect rates to be mostly stable overall through late this year with spot rates leading the way. However, the capacity overhang remains large and will delay anything that could remotely be called a rebound.”
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index score, a positive number represents good, optimistic conditions and a negative number represents the opposite.
