FTR’s Shippers Conditions Index (SCI) for July fell back from June’s 8.8 measure to a still-positive reading of 4.3, FTR reports. The SCI reflects a mixed freight environment with the industrial sector flat or worse, but consumer spending is still healthy. Firmer freight rates in July contributed to the decline in the index.
While the July SCI was significantly lower than June, it is more in line with recent history and the near-term outlook, FTR says. The June index, which was the strongest since early 2016, appears to be an outlier in the current environment. FTR projects the SCI will remain in the mid-positive range similar to July for the next year. However, any significant increase in fuel prices due to IMO 2020 and other potential risks to diesel costs could affect that forecast and create a more negative situation for shippers.
“Shippers will continue to benefit from a weaker freight environment through the next few months and into 2020,” Todd Tranausky, vice president of rail and intermodal at FTR, said. “Rail carload volumes took a step down in recent weeks that should further improve rail service. Rail intermodal and truckload markets will remain tightly matched until at least the middle of 2020, giving some shippers modal choice.”