FTR’s Shippers Conditions Index (SCI) for October, as reported in the December Shippers Update, fell sharply to a -12.38 reading. October was the lowest reading since the all-time low was reached in March of this year reflecting worsening market conditions for shippers. The primary cause of the severe decline was the surge in diesel prices during the month, but was also negatively influenced by tighter capacity utilization. The most significant impact to the shippers’ environment remains freight rates.
“Shippers conditions should gradually ease in the new year with active truck utilization moving off of the full utilization level it has maintained since the recovery from the pandemic started in 2020, but active truck utilization is still expected to be at high levels throughout 2022 and it will take time for additional rail capacity to come online,” said Todd Tranausky, vice president of rail and intermodal at FTR. “This will keep shippers’ conditions from improving dramatically or quickly in the new year. Uncertainty about the disruption that could be caused by the Omicron variant remains high and could prove to be a wild card for demand and supply early in the new year.”
The outlook for the SCI is for a gradual improvement over the next several months, but readings likely will remain at least mildly negative through 2022 and perhaps beyond.
The December issue of FTR’s Shippers Update, published Dec. 7, provides a detailed analysis of the factors affecting the October Shippers Conditions Index and provides the forecast for this index through October of 2022. The December issue includes a discussion of why the nearly complete recovery of payroll jobs in trucking does not describe what is happening with truckload drivers.
The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance.
