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Sunday, October 2, 2022

June Shippers Conditions Index Indicates Worst Seems To Be Over For Now

 

FTR’s Shippers Conditions Index for June was -9.5, which means it improved by nearly three points from the previous month. This is an indication the worst may be over for now. 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% higher than 2017, with 2019 forecast to be up another 6%. 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 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.