Dropping diesel prices boost business conditions for shippers

Shippers gained better business conditions in October thanks to a continuing drop in diesel prices, according to a study from the freight transportation analysis firm FTR.

FTR’s Shippers Conditions Index (SCI) made more gains into positive territory in October, rising to a reading of 4.3 from September’s 0.35. And that trend is expected to continue in the long run, as sector stays mostly stable through the start of the new year, the Bloomington, Indiana-based firm said.

“Overall market conditions for shippers in October as measured by the SCI were the most favorable since June, but swings in fuel costs largely have been the variable month to month,” Avery Vise, FTR’s vice president of trucking, said in a release. “Key freight dynamics – rates, utilization, and volume – have been mostly stable over the past several months and look to be so for at least a few months of 2024. After the boosts from falling diesel prices in November and December 2023, we expect market conditions for shippers to soften gradually, but we do not foresee significantly negative conditions during the forecast horizon.”

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 shows good, optimistic conditions when positive and the opposite when negative.