Shippers Conditions Index Turns Negative in December, Reflecting Market Volatility

The freight market landscape took a downturn in December, as FTR’s Shippers Conditions Index (SCI) fell to -1.8, marking only the second negative reading since August 2023. This shift follows a +2.3 reading in November, demonstrating the impact of fluctuating freight volumes and tightening capacity.

Market Pressures and Uncertainty

FTR’s latest data underscores how increased freight volume and higher capacity utilization put pressure on shippers in December. While these changes had only a marginal effect on freight rates, they contributed to an overall deterioration in shipping conditions.

Avery Vise, FTR’s vice president of trucking, cautioned that the market will likely remain volatile as the industry adapts to evolving trade policies. “Market conditions for shippers likely will be volatile in the near term as the supply chain reacts to the plethora of tariff impositions and threats as well as similar measures such as the proposed port access fee related to China. Our forecast for the SCI is slightly weaker than it was previously but generally not as weak as it was in December,” Vise explained.

Tariffs and Policy Shifts Drive Uncertainty

One key factor shaping the freight market is the impact of new tariffs and trade restrictions. The recent imposition of additional tariffs on Chinese goods—without the temporary relief granted to Canada and Mexico—has created ripples across the supply chain. Retaliatory actions by China, including tariffs on U.S. coal, LNG, and farm equipment, as well as restrictions on critical rare earth minerals, are likely to increase uncertainty for U.S. shippers in the months ahead.

A Challenging Outlook for Shippers

Despite the recent downturn, FTR does not anticipate conditions to deteriorate significantly throughout the year. However, supply chain managers will need to navigate an increasingly complex environment, balancing costs, capacity, and shifting regulations.

The latest Shippers Update, published February 7, includes further insights on the evolving energy policy under the new administration and its potential effects on transportation costs.

For a deeper dive into the data and to access accompanying charts, visit FTR’s Shippers Conditions Index.

About FTR

For over 30 years, FTR has provided expert freight transportation forecasting for shipping, trucking, rail, intermodal, equipment, and financial markets. With an extensive database and proprietary Freight•cast™ modeling, FTR delivers actionable insights to help businesses navigate market uncertainties.

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