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Shippers Conditions Index Continues to Improve, But Remains Negative

01.23.15


FTR’s Shippers Conditions Index (SCI) for November 2014, at a reading of -3.2, continued to reflect the easing of capacity tightness combined with a significant drop in fuel prices. While capacity conditions improved in 2014Q4, from the critical stage earlier in the year, it is still a negative factor along with rising rates that will continue to impact shippers throughout 2015.  With fuel pricing continuing to drop in early 2015, FTR expects the SCI to hit positive territory to start off 2015 before moving lower and then remaining in negative territory indefinitely, barring a recession.  


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



Jonathan Starks, FTR’s Director of Transportation Analysis, commented, “While capacity pressure modestly eased from the extremes that persisted during the first half of 2014, it still remains a tight market by historical standards. The biggest impact on the SCI recently has been the dramatic drop in fuel prices. This is a positive for shippers, as long as it continues to move lower. Once prices bottom out and move back up, the overall costs for shippers will move up correspondingly. The fuel decline is good for total spending, but the base rates being charged by carriers continue to move higher. Driver wages are moving up (approaching double-digit gains) in response to the tight capacity situation and the driver shortage.”

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 exploring how long the current economic recovery is expected to last are found in the January issue of FTR’s Shippers Update published January 8, 2015.  Bonus commentary is included in the January issue addressing the forbidden word: “recession.”

 

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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