Bloomington, IN - FTR’s Shippers Conditions Index for November got a little bounce to a 7.0 reading after (3) consecutive months at 6.4. All index inputs were stronger in November than in October except for freight volume, which remained muted but positive.
The SCI is likely at its peak as conditions for shippers while remaining positive in 2020, is expected to soften going forward due primarily to firmer freight rates and tighter capacity utilization. Although unknown at this time, fuel prices could also have a negative effect on shippers’ costs if IMO 2020 and conflicts between the U.S. and Iran put pressure on them.
Todd Tranausky, vice president of rail and intermodal at FTR, commented, “Capacity is forecast to slowly tighten over the course of 2020, which will lead to slightly worsening conditions for shippers. Truck capacity is expected to slowly increase to its historical range this year, causing shippers to examine rail and intermodal alternatives as the increased truck utilization pushes truck rates higher and makes alternatives more attractive.”
The January issue of FTR’s Shippers Update, published January 7 details the factors affecting the November Shippers Conditions Index. Also included in January is a discussion of the possible impacts of coming regulatory changes at the state, national and global levels.
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.
