The most recent edition of the Shipper Conditions Index (SCI), which was recently released by freight transportation consultancy FTR, saw a modest sequential gain.
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.”
The January SCI, which is the most recent month for which data is available, was -9.8, which was an improvement over December’s -10.9. FTR said that the fourth quarter of 2020 presented the most difficult market conditions for shippers going back to early 2018.
Looking at January, FTR said that overall shipping conditions saw a slight improvement in January, with near-term conditions, due to rising fuel costs and rates. And the firm added that it is forecasting modest improvement in conditions going forward, with the SCI expected to be in the low single-digit negative range through the majority of 2021.
“It is unlikely that shippers’ conditions will improve much over the balance of the year as additional freight demand underpinned by additional consumer stimulus will keep capacity tight through the end of the year,” said Todd Traunausky, FTR vice president of rail and intermodal, in a statement. “Higher rates and higher fuel surcharges are also a risk as the economy recovers. This could add negative pressure to the outlook for shippers later in 2021. A big question is how quickly truck driver capacity will return as that will largely dictate the direction of rate pressures not only in trucking but in intermodal as well.”