FTR’s Positive Shippers Conditions Index in December Could Be the Last for a While

The freight market has deteriorated for shippers, and the outlook is consistently weak

FTR Shippers Conditions Index for December came in at a deceptively positive reading of 1.0 – up from -2.9 in November.  A sharp drop in diesel prices during the month more than offset tightening capacity utilization. Aside from unpredictable swings in fuel costs, the outlook for shippers’ market conditions looks notably more negative. The freight market has deteriorated for shippers, and the outlook is consistently weak.
 
Avery Vise, FTR’s vice president of trucking, commented, “We already were forecasting somewhat unfavorable market conditions for shippers, and that outlook is tougher still in our latest analysis. Much of that deterioration is based on our expectations for stronger freight volume placing greater demand on freight capacity, but the road ahead is rocky for shippers even if our modestly stronger freight demand projections are too rosy. The excess capacity that had favored shippers for a couple of years or more is history, and stresses – even if brief – will cause hiccups that result in higher costs.”
 
The February FTR’s Shippers Update, published on February 6, includes a discussion of factors supporting a change in FTR’s forecast for truck freight volume and the implications for shippers.
 
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 summarizes the industry’s health at a glance.
Source: FTR

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