May 23, 2019

FTR: shippers see improving freight transportation conditions

Outlook good for 2019 if fuel prices remain stable, firm says.

By DC Velocity Staff

Shippers got more good news about the freight market today as truckload and intermodal rates continued to drop from their record highs of 2018, setting up an outlook for less expensive trucking fees through 2019, according to the latest monthly index of market conditions generated by the industry consulting firm FTR.

Bloomington, Ind.-based FTR's Shippers Conditions Index (SCI) for March reflected a reading of 2.8, which was an increase of two full points from February and a giant leap above its reading of -10.5 for the same month last year.

FTR calculates its SCI by tracking four major variables in the U.S. full-load freight market, including freight demand, freight rates, fleet capacity, and fuel price. The firm then combines those individual metrics into a single index that measures changes in shippers' freight transport environment. A positive score represents good, optimistic conditions, while a negative score represents bad, pessimistic conditions.

The positive trend in the March SCI shows the flip side of the freight market, since FTR's complementary index for truckers—known as the TCI—fell into negative territory in March for the first time in "several years."

Despite the positive trend for shippers, FTR warned that economic conditions could change in future months and cause freight costs to rebound. "Shippers are benefiting from relatively stable fuel prices and weaker trucking capacity utilization than they experienced in 2018. But both of those metrics are expected to tighten up as the year progresses," Todd Tranausky, FTR's vice president of rail and intermodal, said in a release. "Diesel prices could move up in the fourth quarter ahead of the IMO 2020 fuel mandate, which could pressure fuel surcharges higher late in 2019."

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