The new edition of the FTR Shippers Conditions Index (SCI), which was recently issued by freight transportation consultancy FTR, took a significant step back.
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.”
For July, the most recent month for which data is available, the SCI reading came in at 1.6, well below June’s 7.9.
FTR said that all components of the SCI were weaker in July than in June, adding that the most significant changes were stronger capacity utilization and higher fuel costs. And it also noted that July market conditions for shippers were the least favorable in nearly a year resulting in the weakest SCI since October 2022.
Looking ahead, FTR said that fuel costs will be an even bigger hit to the August SCI, coupled with gradually stronger freight volumes, utilization, and rates likely to soften conditions toward neutral by mid-2024.
“Stronger fuel costs were a driver of the Shippers Conditions Index to its lowest level in nearly a year,” said Todd Tranausky, vice president of rail and intermodal at FTR, in a statement. “With rising crude oil prices, it appears the stronger diesel prices are with the industry for the foreseeable future. This will limit how positive the SCI can be in future months and put it on a trajectory to hold near neutral unless fuel prices make another jump higher, in which case they could turn more sharply negative.”