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ECONOMIC WATCH: Shippers’ conditions deteriorate as rates swing in carriers’ favor

BLOOMINGTON, Ind. – Shippers’ conditions deteriorated in July, falling into negative territory for the first time since August 2018, FTR reports.

The FTR Shippers Conditions Index (SCI) recorded a -0.36 reading, reflecting weak market conditions and a rate environment that swung heavily in carriers’ favor.

(Source: FTR)

FTR projects increased capacity to push the index back into positive range by the fourth quarter for shippers, and through 2021. But continued high capacity utilization is a significant risk.

“It has been harder than expected to bring truck drivers back into the driver pool,” said Todd Tranausky, vice-president of rail and intermodal. “This has created tightness in the truckload market that has bled over into the intermodal space. It is unknown how long the present situation will last, as it may be related to retail restocking or part of a longer-term shift in spending away from services and toward goods. A shift toward goods would result in stronger freight demand and worse conditions for shippers.”

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