FTR’s Shippers Conditions Index for March at 19.7, which more than doubled the level of February, reflects the most favorable market conditions ever. Operational challenges remain, but utilization, rates, and fuel costs all turned highly favorable due to COVID-related influences. FTR projects that increasingly favorable conditions for shippers will likely send this index significantly higher in Q2 as plunging capacity utilization causes rates to fall and fuel costs sink further.
Eric Starks, Chairman and CEO at FTR, commented, “We know that the SCI is going to surge in the second quarter as the pandemic drove freight levels down, thus, freeing up an unprecedented amount of trucking capacity. The real question is when will the turning point occur and start to move the SCI lower again. With recent freight data through the end of May showing an uptick in activity, the SCI should move in an inverse fashion and drive the index number lower in June. One thing we will be watching is a potential shortage of capacity available for shippers in the short-term as carrier's and drivers adjust to any sporadic upsurge in regional demand over the next several months. However, much will depend on the spread of the coronavirus and its impact on the broader economy.”
The May issue of FTR’s Shippers Update, published May 7 details the factors affecting the March Shippers Conditions Index. Additional commentary updates the COVID-19 discussion including FTR’s view on what a restart to the economy might look like.
The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem...and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double-digit readings (both up or down) are warning signs for significant operating changes.
