The new edition of the Shippers Conditions Index, which was recently issued by freight transportation consultancy FTR, trended down from its previous edition.
FTR describes the SCI as an indicator that sums up all market influences that affect the transport environment for shippers, with a reading above zero being favorable and a reading below being unfavorable and a “less-than-ideal environment for shippers.”
For June, the most recent month for which data is available, the SCI came in at -3.6, down from May’s -0.9, April’s -0.6, and March’s 0.1 readings. That was preceded by -0.3 February reading. The January SCI was 0.6 and was preceded by October’s 1.3 reading, that fell from September’s 4.6 reading. The August SCI was 2.9, with July at 0.5; June at 0.3; May at 4.5, and June at 3.0—which was preceded by several months of declines.
The firm observed that shippers are dealing with their “toughest market conditions” over the last three years, with the caveat that an increase in fuel prices, related to now-eased tensions with Iran, was a major driver for the decline, adding that aside from fuel volatility, market conditions for shippers are basically neutral in the near term.
“The freight market still looks soft well into next year but not quite as soft as it did a month ago,” said Avery Vise, FTR’s vice president of trucking. “While that’s not great news for shippers, it’s not really bad news, either. Still, the range of possibilities remains broad due to an uncertain impact from recent tariff hikes potentially offset by a boost in activity due to lower financing costs and July’s enactment of tax cuts. Another wild card is capacity, which has been surprisingly resilient but might not be able to withstand rising insurance costs and other cost and regulatory pressures.”
