FTR Shippers Conditions Index for March Falls after Four Consecutive Months of Improvement


FTR’s Shippers Conditions Index (SCI) fell to a near neutral reading of 0.4 in March after improving for each of the four previous months. The risk of diesel prices rising has put pressure on the fuel cost component of the index, reflected in the current month’s decline. However, the SCI is expected to remain in positive territory at least until late 2016 as the weakening of freight conditions continues to favor the shipper.

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 conditions for shippers are approaching critical levels, based on available capacity and expected costs. Details of the factors affecting the March Shippers Conditions Index, along with an overview of how rising inventory levels are likely to impact truck demand, are found in the May issue of FTR’s Shippers Update published May 9, 2016.

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

Jonathan Starks, Chief Operating Officer at FTR, commented, “Demand for trucking and rail services has been sluggish so far in 2016. The upside for shippers is that capacity has loosened relative to where it has been over the last couple of years, and some contract rate negotiations have shown sizable declines. Anecdotes indicate as much as a double-digit drop in base contract rates, although the data that we track show negative pricing in the dry van market is generally offset by merely weak pricing in other segments. The high inventories that are persisting in the retail supply chain seem to be impacting the dry van market much more significantly.

"We are nearing a point in time where the chance of another round of capacity shortages would bring even more pressure to build inventories. At the same time, macroeconomic forces could weaken sales enough to kick off a traditional round of inventory reductions. Maintaining adequate stock levels under these countervailing pressures will test the best logistics functions.”

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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