The new edition of the Shippers Conditions Index, which was issued today by freight transportation consultancy FTR, turned positive for the first time in several months.
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 April, the most recent month for which data is available, the SCI came in at 3.0, following March’s -1.2 reading and February’s -1.4 reading, with the latter representing first negative reading following several months of growth, going back to September 2022. The January SCI came in at 3.4, which was 3% below December’s 6.4 reading and also below November’s 6.3.
FTR explained that each component of this index was at least slightly favorable, with freight rates being the principal factor in better market conditions for shippers. The firm also noted that while market conditions might remain strong for a few more months, it is forecasting some pending deterioration, with the SCI expected to drop to more neutral readings in the coming months.
“Freight rates in April were as favorable for shippers as they have been over the past year, but that climate likely will deteriorate modestly soon as capacity utilization has already begun to tighten a bit,” said Avery Vise, FTR’s vice president of trucking, in a statement. “However, aside from unpredictable swings in fuel costs, we do not forecast negative SCI readings over the next couple of years that come close to matching the scope of positive readings recorded from mid-2022 through the end of 2023. Much can happen to change the situation, of course, but the freight market is shaping up to be much more balanced between shippers and carriers in 2025.”