FTR’s Shippers Conditions Index significantly increases in February reflecting a sharply positive freight market

FTR’s Shippers Conditions Index increased significantly in February to a reading of 7.93 up from January’s 3.73.  This increase ended three straight months of small declines. It is likely to increase dramatically in the next few months in response to weak volumes and rates stemming from the COVID-19 pandemic. The sharp uptick is not necessarily a sign that shippers are doing well, as much as it showcases the impact on transportation of the COVID-19 virus.  It is not expected to remain at elevated levels for long, but will remain positive for shippers through the balance of 2020 as capacity will be slow to reach equilibrium.

Todd Tranausky, vice president of rail and intermodal at FTR, commented, “The recent uptick in the Shippers Conditions Index is expected to continue for the next several months, but it does not necessarily mean it is a great time to be a shipper as it flows from the COVID-19-related disruptions. The one positive for shippers out of the virus will be a much more positive environment for the balance of 2020 than was expected otherwise. It will take time for capacity and volume to right size and while it does, shippers should be able to obtain favorable terms to ship their goods.”
The April issue of FTR’s Shippers Update, published April 7 details the factors affecting the February Shippers Conditions Index. Also included in April is commentary discussing the coronavirus outbreak.
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. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem...and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.