FTR Shippers Conditions Index for July Reflects Benign Conditions for Shippers


FTR’s Shippers Conditions Index (SCI) for July, at a reading of -1.3, continues to reflect the short term stability of capacity utilization and steady fuel prices that are aiding shippers in containing costs. However, FTR expects the SCI to fall gradually during the balance of 2015 with a more severe negative downturn in 2016 due to forecasted stronger freight conditions and rising fuel prices.

The Shippers Conditions Index is a compilation of factors affecting the 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 July Shippers Conditions Index, along with special commentary from FTR discussing the recent volatility in the stock market, are found in the September issue of FTR’s Shippers Update published September 8, 2015.

Click here to view the latest release and an interactive graph of the SCI>

Jonathan Starks, Director of Transportation Analysis at FTR, commented, “Shippers continue to operate in an environment in which freight demand is okay, but not great, and capacity is available, but not abundant. The supply and demand equation for trucking has certainly loosened during 2015 but is still operating at historically tight levels. This has enabled carriers to continue their work on raising base rates, while at the same time shippers are still benefitting from the rapid reduction in fuel costs at the end of last year (and occurring to a minor degree right now). So far, the drop in fuel has been enough to overcome the raises in contract rates. That will change once we hit 2016 and the low fuel prices will be reflected in year-over-year comparisons. Truck rate data coming from highlights that the spot market has softened considerably from last year, with pricing (excluding fuel) down over 6%. This should be a positive for shippers in the near-term since we expect contract pricing to reflect that behavior, and many shippers should see smaller base rate increases during winter negotiations. The big caveat is that the regulatory environment still looms large, although it is looking more like a 2017 phenomenon rather than 2016.”

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 Ryan Beall at (888) 988-1699 ext. 1.
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