Shippers Once Again With Upper Hand As Conditions For Carriers Worsen

Little Rock, Arkansas – Shippers are once again gaining the upper hand in freight negotiations as conditions for carriers continue to fizzle, according to leading trucking and freight analyst FTR.

FTR reports its Shipping Conditions Index (SCI) moved into positive territory in December after an essentially neutral reading in November. The December SCI measure at 1.7 was the strongest for the index since August of 2016.



Todd Tranausky, vice president of rail and intermodal at FTR, offered this analysis. “Stable fuel prices, a turn in rail service levels, and loosening truck capacity have combined to create a favorable environment for shippers seeking to move freight,” he said.


After a short weakening period in Q1 ’19, FTR predicts the SCI to maintain the December level through the balance of the year. “The situation is forecast to continue for much of 2019, as fuel prices remain stable and economic conditions hold firm,” Tranausky said.

FTR’s Trucking Conditions Index (TCI) interestingly bounced back from its recent swoon spiking in December to a reading of 11.46.  FTR says the sharply improved December reading is “a result of strong m/m growth in volumes along with a favorable fuel environment.”



The unusual dual positive readings in December for measuring both Shippers Conditions as well as Trucking Conditions were primarily driven by improved freight volume and lower fuel prices without much change in freight rates.

Avery Vise, FTR’s VP of Trucking, cautioned carriers against over-estimating December’s TCI. “While we don’t anticipate truly negative trucking conditions at any point in 2019, we think we have seen the end in this cycle of the abnormally strong pro-carrier conditions that had held sway from the days following the 2017 hurricanes through the second quarter of 2018,” Vise said. “December 2018 probably was just one last taste of the good ol’ days of six months ago.”



About the SCI

The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: 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. The index tells you the industry’s health at a glance. Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.

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