A measure of freight market activity called the Trucking Conditions Index (TCI) in February declined to -5.17 from January’s -1.71 reading, reflecting weaker freight rates and volume, according to Bloomington, Indiana-based analysis firm FTR.
The TCI is forecast to remain in negative territory until well into 2024, as those headwinds for trucking companies more than offset slight improvements in utilization and fuel costs, FTR said.
“While market conditions for trucking companies weakened in February, the relatively better – though still negative – TCI in January was the outlier,” Avery Vise, FTR’s vice president of trucking, said in a release. “The industrial and consumer sectors are sluggish, although spending on goods is still elevated and consumer inflation is slowing. Freight volume is holding up better than many anticipated, but downside risks are substantial. Although fears of a major banking crisis have abated since March, tighter lending standards by banks on top of the Federal Reserve’s interest rate hikes could slow the economy further.”
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 indicating the industry’s overall health, a positive number represents good, optimistic conditions and a negative number shows the opposite.