Freight conditions improved in June, but shippers still lag carriers
Plummeting diesel prices helped loosen market as crucial winter peak draws near
Carriers still enjoy leverage over shippers in the U.S. freight sector, but that balance grew slightly tighter in June as plummeting gas prices helped to add extra capacity to a tight market, a study from the transportation analyst firm FTR shows.
Retailers and logistics service providers are keeping a close eye on the results as the crucial winter peak season draws closer, and they ramp up for a cargo surge to meet holiday demand.
The firm’s Shippers Conditions Index (SCI) improved somewhat in June to a less negative reading of -4.0 from the previous -6.2 in May, and will “likely” reach positive levels when the July conditions are tallied. Bloomington, Indiana-based FTR calculates the index by tracking four variables in the U.S. full-load freight market: freight demand, freight rates, fleet capacity, and fuel price. Combined into a single number, the index shows good, optimistic freight transport conditions when positive, and a poor shipping market when negative.
The latest calculation showed that the June SCI hit its strongest point since September 2020, although backups at maritime ports could handicap that improvement.
“Lower diesel prices will create a slowly improving situation for shippers, but it will likely be the only factor improving in the near term,” Todd Tranausky, vice president of rail and intermodal at FTR, said in a release. “Congestion remains an issue at ports and inland rail terminals, and it will likely hold back how much capacity is available in the system during the peak season.”