FTR’s Shippers Conditions Index (SCI) for August at a 6.4 reading reflects a still-positive rate outlook. The August SCI improved from July but falls below June’s 8.8 reading which likely represents the peak of the current cycle.
FTR projects a softening in the SCI measure due to firmer freight rates. However, the index is projected to stay in positive territory through 2020. The sizable unknown is how IMO2020 ultimately affects fuel prices and the associated shipping costs. This will be monitored closely by FTR.
Todd Tranausky, vice president of rail and intermodal at FTR, commented, “IMO 2020 will be the wild card in determining overall shipper conditions at the start of next year. But we expect overall shipper conditions to remain broadly positive until the second half of 2020 even as freight rates move higher over that period. Capacity remains available in both the rail and truck markets for shippers seeking to move freight.”
The October issue of FTR’s Shippers Update, published October 4, 2019, details the factors affecting the August Shippers Conditions Index. Also included in the October report is an analysis of the effects of global trade on the U.S. economy.
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.
For more than 30 years, FTR has served as the industry leader in freight transportation forecasting for the shipping, trucking, rail, intermodal, equipment, and financial communities in North America. FTR’s experts, with over 250 years of combined experience in the transportation industry, provide quantitative analysis with historical and modal-specific insights. FTR’s reports, data, commentary, and insights help clients evaluate market risks, identify new opportunities, and make informed decisions.
FTR is the only company with a complete set of freight data for all modes of transportation with detail at the 3 Digit STCC commodity level. FTR tracks and forecasts 200+ unique commodity groups both quarterly and annually using their proprietary Freight•cast U.S. freight transportation model. FTR’s Transportation Conference held annually in September in Indianapolis is a unique event bringing together every aspect of the freight transportation world into one place. For more information www.FTRconference.com
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