Shippers 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."