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FTR’s July Shippers Conditions Index falls to negative territory

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David Sickels is the Associate Editor of Tire Review and Fleet Equipment magazines. He has a history of working in the media, marketing and automotive industries in both print and online.

The FTR Shippers Conditions Index fell into negative territory for the first time since August 2018, with a -0.36 reading.

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FTR says after a huge positive spike as COVID-19 impacted freight movement, the SCI now reflects a continued weakening of shippers’ market conditions. Freight volume and utilization were actually more favorable to shippers in July, but the rate environment swung from significantly positive in June to a significantly negative reading in July.

After a near term slightly negative view for the SCI, FTR expects potential increased capacity to push the index back into the positive range by Q4 and through 2021. However, continued high capacity utilization is a significant risk, FTR says.

“It has been harder than expected to bring truck drivers back into the driver pool. This has created tightness in the truckload market that has bled over into the intermodal space,” say Todd Tranausky, vice president of rail and intermodal at FTR. “It is unknown how long the present situation will last, as it may be related to retail restocking or part of a longer-term shift in spending away from services and toward goods. A shift toward goods would result in stronger freight demand and worse conditions for shippers.”

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