Environment for Shippers Starts to Show Deterioration

The latest edition of the FTR Shippers Conditions Index (SCI) released by freight transportation consultancy FTR took a step back from May to June, the most recent month for which data is available.

June’s SCI reading, at 7.9, was down compared to May’s 8.6, with FTR observing that the reading was negatively impacted by gains in diesel prices. According to the U.S. Energy Information Administration, the national price for diesel fuel has climbed from a low of $3.76 per gallon on July 3 to $4.48 last week. It had hovered in the $3.80 range for much of May and June.

FTR added that market conditions are stable for shippers overall in June, with the caveat that going forward, its outlook is “progressively weaker” due to the projected sharp increase in diesel costs, which are expected to be reflected in less favorable SCI readings in the coming months.

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.”

“Fuel is one of the most volatile components that can impact shipper conditions through its ability to move fuel surcharges and capacity around,” said Todd Tranausky, vice president of rail and intermodal at FTR, in a statement. “It weakened overall shipper conditions in the latest month, but the SCI remained at a fairly positive level overall. If fuel prices continue to increase, it will push less-positive readings in the SCI in the months ahead.”

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