FTR’s July Shippers Conditions Index fell precipitously reflecting least favorable market conditions for shippers in nearly a year

FTR’s Shippers Conditions Index (SCI) fell significantly in July to 1.6 from June’s 7.9 reading. All components of the SCI were weaker in July than in June but the most significant changes were stronger capacity utilization and higher fuel costs. July market conditions for shippers were the least favorable in nearly a year resulting in the weakest SCI since October 2022. Fuel costs will be an even bigger hit to the August SCI. Fuel costs aside, gradually stronger freight volumes, utilization, and rates likely will soften conditions toward neutral by mid-2024.

Todd Tranausky, vice president of rail and intermodal at FTR, commented, “Stronger fuel costs were a driver of the Shippers Conditions Index to its lowest level in nearly a year. With rising crude oil prices, it appears the stronger diesel prices are with the industry for the foreseeable future. This will limit how positive the SCI can be in future months and put it on a trajectory to hold near neutral unless fuel prices make another jump higher, in which case they could turn more sharply negative.”

The September issue of FTR’s Shippers Update, published September 7 provides a detailed analysis of the factors affecting the June Shippers Conditions Index and provides the forecast for this index through July of 2024. The September edition includes commentary analyzing the ongoing decline in the for-hire carrier population.

The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance.