Ftr Shippers January

FTR: Shipper conditions deteriorate in January

March 23, 2022
Rising fuel costs, higher freight rates, due in large part to the war in Europe, provide ‘little reason for optimism conditions will improve,’ industry analyst says

FTR’s Shippers Conditions Index (SCI) fell sharply in January to -10.1 from the December reading of -6.9.

Rising fuel costs and higher freight rates resulted in difficult market conditions for shippers in January, despite a slight relief in freight demand and utilization, FTR said. The near-term outlook is quite negative as the February forecast already presumes the toughest market conditions since March 2021. The war in Ukraine raises the odds that conditions will remain significantly negative for a longer term.

“Shippers should not expect relief in the next few months or quarters fromthe pain they have experienced recently in higher rates and particularly fuel surcharges,” said Todd Tranausky, vice president of rail and intermodal at FTR. “The war in Eastern Europe increases uncertainty around demand and prices in the weeks and months ahead and provides little reason for optimism that conditions will improve meaningfully.

“It is nearly impossible to see a scenario whereby shippers experience neutral conditions before 2023 without a significant change in underlying economic and geopolitical conditions.”

The March issue of FTR’s Shippers Update, published March 7 provides a detailed analysis of the factors affecting the January SCI and provides the forecast for this index through January of 2023.

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. The index reveals the industry’s health at a glance.

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BT staff