A record surge in fuel costs in the wake of Russia\u2019s invasion of Ukraine will hit trucking conditions in the near term, but the longer-term effects of geopolitical tensions are not yet clear. For now, FTR\u2019s Trucking Conditions Index outlook remains positive, but the downside risks have increased greatly.<\/p>\n
FTR\u2019s Trucking Conditions Index for January fell to 11.46 from 14.45 in December. Although more robust freight rates more than offset the effects of higher fuel costs, freight volume was a significantly weaker positive factor than it had been in December.<\/p>\n
\u201cThe war in Ukraine has introduced a high level of uncertainty into the dynamics of truck freight,\u201d Avery Vise, FTR\u2019s vice president of trucking, said in a press release. \u201cSharply higher fuel costs for carriers are a given, but we do not yet know whether sharply higher gasoline prices on top of strong pre-existing consumer inflation and big swings in the stock market will lead to a drop in consumer spending.\u201d<\/p>\n
Vise adds that many small trucking firms \u2013 especially the tens of thousands of for-hire carriers created since mid-2020 \u2013 may fail following the unprecedented surge in diesel prices.<\/p>\n
\u201cWhether that outcome strengthens or weakens today\u2019s rate leverage for carriers depends greatly on whether failing carriers\u2019 drivers quit the industry or return to driving positions for larger carriers,\u201d Vise said. \u201cWe generally would presume the latter, which could relieve some rate pressure, but the labor market has changed too much during the pandemic to make that a sure bet.\u201d<\/p>\n
The TCI tracks the changes representing five major conditions in the U.S. truck market. These conditions are: freight volumes, freight rates, fleet capacity, fuel price and financing. The individual metrics are combined into a single index indicating the industry\u2019s overall health. A positive score represents good, optimistic conditions. Conversely, a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.<\/p>\n","protected":false},"excerpt":{"rendered":"
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