The Trucking Conditions Index (TCI) by FTR Transportation Intelligence fell back into negative territory in May after a surge for the month of April as historically high prices for diesel fuel continue to weigh down an industry that, according to a leading FTR researcher, otherwise shows signs of health through inflationary times.
The FTR reading for May was -0.3, a sharp decline from the TCI of 3.21 in April. Sharp increases in diesel prices in May offset slightly improved freight market conditions for carriers, according to a July 20 release from the industry research firm.
See also: Diesel prices fall for fourth straight week
Freight demand, capacity utilization, and freight rates were slightly stronger in May but together were unable to diminish the negative impact of record prices for trucking’s main fuel during the month. FTR sees conditions continuing close to neutral territory with TCI readings in either low positive or low negative figures from month to month, according to the FTR release.
“Upward pressures on trucking conditions are largely history at this point. The question now is how high and strong of a floor remains,” said Avery Vise, FTR’s VP of trucking. “Employment data from recent months suggest that drivers are readily available for larger carriers, although much of that growth surely is coming at the expense of very small carriers that are failing due to record diesel prices—at least until recent weeks—and normalizing spot rates.”
Vise added: “Meanwhile, despite soaring inflation and other worries, consumer spending and industrial production have remained surprisingly healthy. Driver capacity has faded as a wild card as the resilience of freight demand has taken its place.”
See also: FTR analysts talk inflation, AB5, shifting freight market
Details of the May TCI are found in the July 2022 issue of FTR’s Trucking Update, which was published on June 30. The July edition also includes a discussion of the dynamics currently supporting a shift of freight demand back to larger contract carriers from smaller carriers and the spot market.
Prices for diesel fuel have actually moderated in recent weeks. The national average for trucking's main distillate is $5.432 per gallon, according to the data release on July 18 from the U.S. Energy Information Administration (EIA), or 37.8 cents lower than June 20, the most recent week the price has risen, with an all-time high of $5.81 nationally that week.
This news might give consumers and carriers an idea that the pain in their pocketbooks is history, but diesel still is $2.088 higher than it was a year ago. Gasoline prices even have declined for more than 30 days in a row, with the EIA pricing gas at $4.49 nationally, a 15.6-cent decrease from last week. But even gas is $1.337 per gallon more expensive than at this time in 2021.
