FTR’s Trucking Conditions Index for March showed its first negative reading in several years, reflecting a softening environment for carriers, the freight market analyst reported.
The lower reading driven by easing freight rates and sluggish, though still positive, demand. Active truck utilization and the truckload rate have also continued to ease. The weakness in truckload rates was attributed mostly to spot rates, but FTR also found that the contract rate outlook has turned slightly negative.
FTR’s outlook for loadings growth has been revised downward from previous forecasts with year-over-year growth now expected to be under 2%.
“The trucking industry has essentially returned to neutral conditions as deterioration in most market factors are offsetting continued solid, but not robust, freight demand,” said Avery Vise, vice president of trucking for FTR. “We generally expect this balance to continue into 2020, but TCI readings could turn positive or negative month to month based on relatively minor shifts in demand, utilization, rates, or costs.”
While orders are low, that doesn’t mean the demand is not. Fleets are continuing to search for open build slots in the 2019 production schedule, according to FTR. Backlogs are fluid with orders being rescheduled, often opening up build slots in the near term. FTR expects this pattern to continue until ordering for 2020 begins.
“Economic growth is expected to moderate soon, slowing down the freight markets,” said Don Ake, FTR vice president of commercial vehicles. “However, currently there is still a need to replace older trucks and also get more new trucks on the road.”