The recent jump in diesel prices negatively impacted FTR’s Shippers Conditions Index (SCI), which fell from May’s 8.6 reading to 7.9 in June.
Overall market conditions for shippers were stable and positive during June, FTR added. However, the outlook is for progressively weaker readings moving forward due to the projected sharp increase in fuel costs. Less favorable readings of the SCI are on the horizon.
“Fuel is one of the most volatile components that can impact shipper conditions through its ability to move fuel surcharges and capacity around,” Todd Tranausky, vice president of rail and intermodal at FTR, said in a news release. “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.”
The August issue of FTR’s Shippers Update provides a detailed analysis of the factors affecting the June SCI and the forecast for this index through June 2024. The August edition also includes an initial assessment of what Yellow’s demise could mean for LTL rates and additional commentary analyzing the potential for a truck pre-buy before 2027, FTR said.
The SCI tracks the changes representing four major conditions in the U.S. full-load freight market: 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.