FTR’s Shippers Conditions Index (SCI) for June at -9.5 improved by nearly three points from the previous month, indicating the worst may be over for now, the company says. However, FTR cautions that conditions have not gotten that much better with rates still rising especially in the truckload sector. Total shipping costs for 2018 should be around 12 percent higher than 2017, with 2019 forecast to be up another 6 percent. Overall, there are some signs of stability coming into the market for drivers, capacity and rates.
Todd Tranausky, vice president for rail and intermodal at FTR, commented, “While conditions have stabilized in the truckload and rail sectors, they remain far from where shippers would like them to be heading into the crucial peak season. Shippers should expect the service they have now to be the service they have through the balance of the year.”
The August issue of FTR’s Shippers Update, published August 6, 2018, details the factors affecting the May Shippers Conditions Index, along with discussion on how a tight labor market could stifle growth because businesses cannot fill positions that are needed. The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market: 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 users 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.
