The new edition of the Shippers Conditions Index (SCI), which was recently released by freight transportation consultancy FTR, pointed to the SCI likely reporting what FTR said could be, “the most unfavorable market conditions ever for shippers.”
The SCI is a key logistics metric showing freight market health for shippers, combining factors like rates, capacity, and fuel; positive scores mean good conditions (more carrier supply), while negative scores signal tight capacity and tougher times for shippers, with readings near zero indicating neutrality, often fluctuating due to economic shifts and events like fuel price changes or new regulations. Recent readings have seen volatility, with shifts towards more challenging conditions as capacity tightens or improves, reflecting an evolving market where shippers need to monitor trends closely for rate changes and potential bottlenecks, according to FTR.
The firm explained that the SCI was already forecasted, in the near-term, to fall to its lowest level in four years, with the caveat that the pairing of surging fuel costs and the tightening freight environment could result in the aforementioned most unfavorable market conditions ever for shippers.
And it added that the firm’s current SCI forecast prior to the US-Israel joint attack on Iran called for the February reading to come in lower than January’s -5.0, the lowest reading since July 2022.
What’s more, the lowest SCI reading on record, March 2022’s -23.1, marks the lowest reading on record, due to ongoing, still-difficult truck freight market conditions, and a $1.15 increase in diesel prices over a two-week period at that time, which was unprecedented, said FTR. But it said that the $0.96 diesel increase seen in the first week of March exceeds the March 2022 increase, with the performance in the coming weeks unknown.
“We wanted to highlight the possibility that the SCI soon could indicate the toughest overall conditions ever for shippers, though the freight components of the index are not yet as tough as they were in early 2022,” said Avery Vise, FTR’s vice president of trucking. “However, the freight market then had started to cool from 2021’s extreme situation while today’s freight market—especially in trucking—is tightening. If the dramatic rise in diesel prices were to sideline even more capacity, the SCI quite plausibly could become even more unfavorable than it was in early 2022.”
