FTR Shippers Conditions Index at lowest level in two years

By LM Staff · October 23, 2020

The most recent edition of the Shippers Conditions Index (SCI), which was issued this week by freight transportation consultancy FTR, continued on an uneven trajectory, with the SCI at its lowest level over the past two years.

FTR describes the SCI as an indicator that sums up all market influences that affect the transport environment for shippers, with a reading above zero being favorable and a reading below being unfavorable and a “less-than-ideal environment for shippers.”

The August SCI, which is the most recent month for which data is available, came in at -1.79, which continued a recent stretch of declines, down compared to July’s -0.36, June’s 1.03, and May’s 24.8, which marks the second highest reading on record, with April’s 41.3 being the highest. The strong April and May readings reflected what the firm called a “huge positive spike as COVID-19 impacted freight movement.”

FTR said that while most factors affecting the August SCI were equal to or more favorable than in July, the rate environment was significantly more unfavorable for shippers. And it added that the short-term outlook is for the SCI to improve, with the caveat that it is expected to become significantly negative in the second half of 2021 primarily due to tighter capacity and higher shipping rates.

“A rapid rise in freight volume coming out of the pandemic as retailers try to restock shelves quickly ahead of the holiday shopping season has created a deterioration in shippers’ power with carriers,” said Todd Tranausky, vice president of rail and intermodal at FTR, in a statement. “The good news is that things should hold fairly neutral in the first half of 2021, but shippers will face more negative pressures in the final two quarters of 2021.”

October 23, 2020