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FTR Shippers Conditions Index for October Reflects Modest Easing of Capacity Constraints

12.17.14


FTR’s Shippers Conditions Index (SCI) for October, at a reading of -5.5, reflects a modest, temporary improvement in capacity conditions. While the capacity conditions have moved out of the critical danger zone of a few months ago, the trucking segment remains highly vulnerable to seasonal shortages. FTR expects the SCI to deteriorate over the next several months especially in light of noticeable increases in costs at carriers, with the exception of fuel, and increased transaction expenses as shippers search harder for capacity to haul their goods.  


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



Jonathan Starks, FTR’s Director of Transportation Analysis, commented, “Of the four key segments that represent the Shippers Conditions Index, fuel is currently the only item with a positive contribution in October. Tight capacity, and the corresponding rate increases, remain the biggest challenge for shippers. While truck utilization has eased from the level seen last winter, it still remains historically high. Likewise, contract rates continue to steadily move higher and spot rates are quite elevated - up 20% y/y in late November." 

"Despite fuel prices continuing to drop, the cheer from shippers may be short-lived. As the economy looks likely to accelerate in 2015 it could cause capacity to tighten once more, leading to further acceleration in base freight rates. The recent inclusion of Hours-of-Service (HOS) changes in the Congressional budget bill is a modest positive for the industry but would not be enough to offset the demand from a strong economy.”

Find out more about FTR’s analysis of the Hours-of-Service changes and listen to an interview with Industry Expert Noël Perry by clicking here >.
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 investigating the likely impacts of falling oil prices on transportation are found in the December issue of FTR’s Shippers Update published December 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 Ryan Beall at (888) 988-1699 ext. 1.
 
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