Freight transportation consultancy FTR reported this week that the most recent edition of its Shippers Conditions Index (SCI) took small steps on the way to continued improvement.
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 zero being unfavorable and a “less-than-ideal environment for shippers.”
For November, the most recent month for which data is available, the SCI edged up 0.6% to a 7.0 reading on the heels of three consecutive readings at 6.4 from August through October.
FTR explained that all of the SCI’s inputs were better from October to November, with the exception of freight volume, which it said was muted but positive. And it added that the SCI is likely at its peak as conditions for shippers—while remaining positive in 2020—is expected to soften in the coming months due mainly to firmer freight rates and tighter capacity utilization. What’s more, the firm pointed out that there is a possibility that fuel prices could have a negative effect on shippers’ costs should IMO 2020 and U.S.-Iran conflicts pressure prices.
“Capacity is forecast to slowly tighten over the course of 2020, which will lead to slightly worsening conditions for shippers,” said Todd Tranausky, FTR vice president of intermodal and rail in a statement. “Truck capacity is expected to slowly increase to its historical range this year, causing shippers to examine rail and intermodal alternatives as the increased truck utilization pushes truck rates higher and makes alternatives more attractive.”
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