FTR’s December Shipping Conditions Index hits highest level since May 2020

The most recent edition of the Shipping Conditions Index, which was recently issued by freight transportation consultancy FTR, remained in positive territory, for the second consecutive month.

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.”

For December, the most recent month for which data is available, the SCI came in at 10.32, up from November’s 3.0 reading, which was preceded by -3.1 and -0.3 readings in September and October, respectively. December represented the highest SCI reading going back to May 2020.

FTR cited a significant decline in fuel prices in December having a significant impact on what it described as already strong market conditions. What’s more, the firm said that when eliminating the strong impact of dropping fuel prices, the December SCI—with a very favorable environment for shippers in terms of freight rates, capacity utilization, and volume—would have been the best since the May 2020 reading. And it added that the SCI outlook is a bit stronger than the prior forecast with uninterrupted positive readings well into 2024.
 
“Declining active truck utilization, lower truck rates, and improving rail service should all help shippers experience more favorable conditions going forward,” said Todd Tranausky, vice president of rail and intermodal at FTR, in a statement. “These factors are expected to remain in place through 2023 before starting to swing back toward carriers next year. The improvement will be a welcome respite for shippers who faced higher rates and capacity shortfalls coming out of the COVID-19 pandemic in 2020 and 2021.”