Data in the most recent edition of the Trucking Conditions Index (TCI) issued this week by freight transportation consultancy FTR showed softer market conditions gaining traction.The TCI reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight.According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above ten indicating that volumes, prices, and margin are in a good range for carriers.For December, the most recent month for which data is available, the TCI was 2.9, which is down from November’s 4.38 and October’s 4.58.FTR said this decline correlates to soft conditions that impacted the sector over the second half of 2016, with the expectation that it will bottom out in January and head up over the duration of 2017, which is in line with the firm’s previously stated projections of steadily improving conditions, due to factors such as expectations for stronger demand and the electronic logging device (ELD) mandate expected to tighten capacity.“The U.S. economy remains on stable footing, but there are several risks that are creating uncertainty in the transportation sector,” said FTR COO Jonathan Starks in a statement. “First on everyone’s mind is the potential for significant change with the new White House administration. The most anticipated issue for transport companies is trade, specifically among our NAFTA partners. There is potential for some very significant changes coming from tariffs and taxes. After working on creating a North American supply chain over the last 25 years, anything that significantly restricts trade flows between two of our biggest trading partners will create stress throughout the supply chain.”Starks also noted the ELD implementation scheduled for December could be markedly impacted should the White House or courts significantly curtail or remove it, although he noted that should not be the case, given the long-standing bi-partisan support for transportation safety regulations. And he added that FTR will closely monitor how small carriers begin to implement ELD into their operations over the next 9 to 12 months, and how it is likely to affect changes in carrier capacity and rates.Even though the market outlook is showing signs of optimism, the freight environment remains in a pattern of largely flat growth, including fluctuating GDP, decent job growth figures, and signs of increased consumer spending.But these alone have not been consistent enough to translate into sustained economic growth, coupled with excess trucking capacity still being hampered by elevated inventories, which have shown signs of heading down recently. This sentiment was in line with commentary from American Trucking Associations Chief Economist Bob Costello who said in December that retail sales are good, the housing market is solid, and the inventory overhang throughout the supply chain is coming down, all of which will help support truck freight volumes in 2017.Stifel analyst John Larkin said in the LM 2017 Rate Outlook that this year may lead to evidence of the tight supply/demand dynamic flexing its muscles as early as the second quarter volume peak, with truckload carriers approaching shippers asking for price increases.“They will suggest that, absent price increases, capacity might well be disproportionately allocated to customers that have already provided relief with the much-needed rate hikes,” he said. And in the most recent edition of the Cass Freight Index Report, Donald Broughton, the report’s author and analyst at Avondale Partners, wrote that data is beginning to suggest that the consumer is finally starting to spend a little and that with the recent surge in the price of crude, the industrial economy’s rate of deceleration has eased.“If the winter of the overall freight recession we’ve been in for more than a year and a half in the U.S. is not yet over, it is certainly showing promising signs of thawing,” he noted.