FTR’s Shippers Conditions Index remains on downward slide

Following a slight sequential decline to end 2021, the January edition of the Shippers Conditions Index (SCI) issued by freight transportation consultancy FTR saw a steep drop-off.

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 January SCI, which is the most recent month for which data is available, came in at -10.1, down from December’s -6.9. The November SCI reading was -9.0.

FTR said rising fuel costs and higher freight rates served as drivers for what it called difficult market conditions for shippers in January despite a slight relief in freight demand and utilization. What’s more, it added that the near-term outlook is “quite negative,” with the February forecast already taking into account the most challenging market conditions going back to March 2021. And it also stated that the ongoing Russia-Ukraine conflict increases the odds that conditions will stay negative in the coming months.

“Shippers should not expect relief in the next few months or quarters from what the pain they have experienced recently in higher rates and particularly fuel surcharges,” said Todd Tranausky, vice president of rail and intermodal at FTR, in a statement. “The war in Eastern Europe increases uncertainty around demand and prices in the weeks and months ahead and provides little reason for optimism that conditions will improve meaningfully. It is nearly impossible to see a scenario whereby shippers experience neutral conditions before 2023 without a significant change in underlying economic and geopolitical conditions.”