FTR: Shippers enjoyed leverage over carriers in November

Shippers are enjoying their greatest leverage over freight carriers in months, according to a measure of business conditions in November, released today by the freight consulting firm FTR.

The Indiana-based company said its Shippers Conditions Index (SCI) improved in November to 3.0 from the previous -0.3 reading, thanks to a more favorable freight environment and lower fuel costs. The SCI tracks the changes in four conditions of the U.S. full-load freight market, including freight demand, freight rates, fleet capacity, and fuel price. Combined into a single index number, a positive score represents good, optimistic conditions and a negative number shows the opposite.

“The outlook has improved overall for shippers, but it will depend on exactly what mode and lane they operate in, as to how much improvement they will feel in their business. Truck-focused shippers are likely to experience the largest improvements relative to rail and intermodal shippers,” Todd Tranausky, vice president of rail and intermodal at FTR, said in a release.

The report came the same day that another study showed that truck tonnage had ticked up slightly last month, highlighting several months of step declines during the fourth quarter.

The American Trucking Associations’ (ATA’s) advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 0.4% in December after decreasing 2.5% in November. And compared with December 2021, the SA index increased 0.3%, which was the sixteenth straight year-over-year gain, but the smallest over that period.

In December, the index equaled 115.2 (2015=100) versus 114.8 in November. ATA said its index number is a gauge for comparison against a benchmark of 100 for 2015, and noted that the figure is dominated by contract freight as opposed to spot market freight.

Despite that turbulence, ATA said its members had a strong year, with tonnage up 3.4% for the entire 2022 year, which was the best annual gain since 2018. “Despite weakening in the second half, 2022 overall was a solid year for truck freight tonnage,” ATA Chief Economist Bob Costello said in a release. “The index’s yearly gains were primarily driven by strength in the first half of 2022, so despite a marked slowdown as the year ended, for the year as a whole, tonnage posted a very solid year overall.”