FTR Shippers Conditions Index Rises in December with Short Term Positive Reading


FTR’s Shippers Conditions Index (SCI) improved to a positive 3.0 reading in December reflecting a short-term bounce from weaker freight volumes in the month. Longer term capacity concerns will bring the index back into negative territory by 2017. The movement in the index reflects current mild market conditions versus the expectations for capacity shortages in 2017. Despite lower freight volumes and continued low fuel prices, shippers are not getting a full reprieve on the rates they are paying for moving their goods.

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 December Shippers Conditions Index, along with discussion of the threats to the U.S. economy from the current global economic turmoil are found in the February issue of FTR’s Shippers Update published February 8, 2016.

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

Jonathan Starks, Chief Operating Officer at FTR, commented, “The domestic shipping market is in a relatively stable environment. This may seem counterintuitive given the weakness that we are seeing in the manufacturing sector and the loosening of truck and rail capacity over the last year. Despite the easing of capacity constraints contract rates are still moving higher, although we are hearing of more pressure being put on carriers and brokers alike to keep rates in check. The spot market has seen rates down for over a year and brokers have been able to keep their margins up while still giving rate discounts to the shippers. Those margins are likely to come under further pressure in early 2016. One of the main risks for transport costs is the fact that fuel prices have likely bottomed out and we expect them to begin rising. Whether that’s this summer or late this year,  I can’t say, but we do know that oil prices sit at an unsustainable level. Once fuel costs start moving up that will cut right into shippers budgets - budgets that have normalized to the new low price. After 2016 the big threat continues to be the regulatory agenda that is becoming more concrete as the year progresses.”

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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