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FTR Shippers Conditions Index Settles at Low Level Reflecting Persistent Capacity Shortages

11.24.14


FTR’s Shippers Conditions Index (SCI) for September, at a reading of -6.6, is basically unchanged from the previous month reflecting continued capacity shortages that degrade service and push rates higher. With sustained capacity tightness and fleets now announcing pay increases, the cost to ship goods is expected to remain elevated. The typical slowdown in freight tonnage during the winter months will only offer a minor and short term reprieve with the Shippers Conditions Index expected to remain in the current range for the foreseeable future. 


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



Jonathan Starks, FTR’s Director of Transportation Analysis, commented, “While truck capacity hasn’t been as bad as we saw during last winter, it has remained tight and, as a consequence, rates have been elevated throughout the year. Recently, concern has moved from capacity on the roads, to problems at the ports. We are seeing potential impacts to retailers Black Friday plans because of the port congestion. To add to the troubles, importers are getting hit with surcharges at the ports. They are dealing with delays in getting goods and additional costs on top of that. If a resolution of the west coast labor dispute or a winter slowdown in freight doesn’t ease the situation, we could have a very tough operating environment in early 2015 for those that are dependent on those ports.”

“Truck fleets are getting confident in their ability to secure rate increases for next year and have been busy ordering new trucks for delivery in 2015. October truck orders were for over 45,000 units - the second highest total on record! However, we don’t believe that it will be enough to significantly alter the supply and demand balance. The market will soften as we head into the new year (weather permitting) but will tighten again as soon as spring appears. Shippers need to be prepared for another year of dealing with tight capacity and increasing rates - no matter the mode.”

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 explaining the nuances of current economic data affecting trucking and how to interpret the information, are found in the November issue of FTR’s Shippers Update published November 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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