Conditions continue to improve for shippers

Continuing a recent trend, the March Shippers Condition Index (SCI) from FTR shows that conditions are still improving for shippers as capacity and rate pressures ease.

The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. freight market. These conditions are: freight demand, freight rates, fleet capacity and fuel price.

FTR said the SCI for March was up 2 full points from February to a reading of 2.8, reflecting a continued easing of truckload and intermodal rates. The outlook should continue to improve throughout the year, the firm said.

“Shippers are benefiting from relatively stable fuel prices and weaker trucking capacity utilization than they experienced in 2018,” explained Todd Tranausky, vice president of rail and intermodal at FTR. “But both of those metrics are expected to tighten up as the year progresses. Diesel prices could move up in the fourth quarter ahead of the IMO 2020 fuel mandate, which could pressure fuel surcharges higher late in 2019.”

FreightWaves reported this week volumes and rates have been trending down significantly recently, and fuel cost has been rising. The benchmark WTI oil price is up 32 percent since the beginning of the year and rates are down 36 percent from June 2018’s peak to $1.36 per mile according to DAT’s national van rate.

The result of this is that shippers have started moving freight from contracted accounts into the spot market to take advantage of lower pricing.

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Brian Straight

Brian Straight covers general transportation news and leads the editorial team as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler.

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