August 23, 2019

Freight transportation measure favors shippers again in June, FTR says

Trucking rates continue to soften as Shippers Conditions Index hits highest point since February 2016.

By DC Velocity Staff

FTR Shippers Conditions Index - June 2019Shippers are continuing to enjoy prime conditions for moving freight, as a measure of truckload and intermodal rates for June reached their lowest prices since February 2016, 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 June rose to a positive reading of 8.8, up two points from the updated May measure and its highest point in 41 months, FTR said.

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.

Shipping conditions have been improving steadily since having been deep in negative territory throughout the tight capacity market of 2018, even as truckload rates have tumbled and overcapacity has soared.

However, the overall logistics industry picture shows that freight-related indicators are mixed, FTR said. Manufacturing is growing very slowly, and construction is weaker, but consumer spending remains strong, the firm said.

On the transportation side, truckload rates are about 7.5 percent below 2019 with spot rates down nearly 18 percent, whereas less than truckload (LTL) rates have been higher this year. Both are expected to decline in 2020, as intermodal rates continue to be soft and rail expects 5 percent growth in 2019, FTR said.

"The relatively weak rate environment for truckload allows it to compete more effectively with intermodal," Todd Tranausky, vice president of rail and intermodal at FTR, said in a release. "Intermodal volumes have been stymied by trade headwinds, changes in rail service offerings, overall rail service levels, and the weak truck market. International and domestic intermodal each struggled in June with weak results."

Resources Mentioned In This Article

Strategy Videos

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.

Subscribe to DC Velocity

Feedback: What did you think of this article? We'd like to hear from you. DC VELOCITY is committed to accuracy and clarity in the delivery of important and useful logistics and supply chain news and information. If you find anything in DC VELOCITY you feel is inaccurate or warrants further explanation, please ?Subject=Feedback - : Freight transportation measure favors shippers again in June, FTR says">contact Chief Editor David Maloney. All comments are eligible for publication in the letters section of DC VELOCITY magazine. Please include you name and the name of the company or organization your work for.