Shippers will face elevated costs for at least two years, according to a forecast from freight transportation analysis firm FTR finding that shipping conditions improved slightly in May but were still among the six least favorable readings since 2000.
While market conditions for shippers in May were technically less severe than in March and April, that was small consolation as conditions remained extremely challenging, largely due to freight rates. By the numbers, Bloomington, Indiana-based FTR’s “FTR Shippers Conditions Index” for May was -15.4 – a slight improvement from April’s -17.4.
The index tracks the changes representing four major conditions in the U.S. full-load freight market: freight demand, freight rates, fleet capacity, and fuel price. Combined into a single number, the index number represents good, optimistic conditions when positive, and bad, pessimistic conditions when negative.
“As we have indicated for several months, there is little in the way of good news for shippers. The SCI estimate for June is preliminary, but the one relative positive seemed to have been falling fuel costs. However, that factor very recently has stopped improving and could be reversing,” Avery Vise, FTR’s vice president of trucking, said in a release.
“The lone near-neutral contributor to the SCI recently has been – and is expected to be – lack of freight volume pressure on the transportation system, but that experience varies by type of equipment needed. While we expect market conditions to become less daunting for shippers in the months ahead, we expect the SCI to be consistently negative throughout the two-year forecast horizon. Even worse, most risks to that forecast probably are to the downside for shippers,” Vise said.
