Market Overview

Conditions Continue To Improve For Shippers

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.

Image sourced from Pixabay

Posted-In: Freight Freightwaves Logistics shipping Supply ChainNews Markets General


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