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FTR Shippers Conditions Index for August Shows No Relief

10.23.14


FTR’s Shippers Conditions Index (SCI) for August, at a reading of -6.5, remains at a sustained low level reflective of persistent capacity shortages and rising rates.  Costs to ship goods in the current freight environment are expected to remain elevated.  Truck rates have moved firmly upward with 4+ percent gains in contract pricing.  Rail rates are rising as well with strong demand for their services coupled with capacity shortages due to service issues.  The Shippers Conditions Index is expected to remain in the current range for the foreseeable future, as long as freight growth continues.


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Eric Starks, FTR’s President, commented, “Shippers will continue to be squeezed as we move into the holiday season. The capacity situation for trucking is still tight and is not expected to ease back any time soon. Also, the railroads continue to have service issues, and their ability to pick up a significant amount of extra freight is constrained at the moment. We don’t anticipate any increase in service levels from the railroads until well after the holidays are over. The only positive that we see in the short-term is that fuel surcharges passed on to shippers is dropping rapidly as fuel prices drop. This is a welcome sight for shippers, as long as it does not telegraph a slowdown in economic activity that could hurt a shipper’s core business.”

The Shippers Conditions Index is a compilation of factors affecting shippers transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below -10 signal that conditions for shippers are approaching critical levels, based on available capacity and expected rates. 

Details of the factors affecting the Shippers Conditions Index, along with additional commentary discussing the market discrimination between easy and hard to move freight, are found in the October issue of FTR’s Shippers Update published October 8, 2014.

The Shippers Update, launched by FTR during 2010 as a part of the firm’s Freight Focus, looks at conditions that will affect the cost and efficiency of shipping goods via all transportation modes. North American shippers will find in one reference the essential information they need on freight volumes, equipment capacity and transport costs and rates. The Shippers Update has both history and forecasts for four modal options: truckload, less-than-truckload, intermodal and rail carload. The analysis includes the breakdown of total truck and rail volumes into major commodity segments. It also provides historical snapshots of inland water and air freight markets. The freight data is augmented by an abundant collection of supporting data covering macro-economics and the fuel market.

For more information about how to subscribe to the Shippers Update, send an e-mail to [email protected] or call (888) 988-1699 ext. 1.
 
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