Freight transportation consultancy FTR reported this week that the most recent edition of its Shippers Conditions Index (SCI) took a step back from signs of continued improvement in its previous edition.
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 zero being unfavorable and a “less-than-ideal environment for shippers.”
For December, the most recent month for which data is available, the SCI dropped from a 7.0 November reading to 4.6. Despite the decline, FTR said that utilization and logistics costs are still positive, as December freight volumes were slightly negative. And the firm added that the only input to the SCI more positive in December compared to November was fuel costs.
What’s more, it said that the feared impact of IMO 2020 on fuel costs yet to come to fruition, as diesel prices at the beginning of February were the lowest in more than two years. Looking ahead, FTR expects shipper conditions to remain slightly positive through 2020 but weaken further toward neutral later in the year.
“Shippers remain in a very good place at the start of 2020,” said Todd Tranausky, FTR vice president of rail and intermodal, in a statement. “The coronavirus has muddled the 2020 picture a bit, by creating the potential for a surge of volumes and port congestion once the virus’ effects are resolved in China. But any potential issues from a surge are likely to be short lived because of the excess capacity available across freight modes as the year begins.”