Shippers Conditions Index for January Continues to Reflect Short Term Positive Indicators


Shippers Conditions Index (SCI) for January rose to a positive 2.6 reading, reflecting a one month reaction to fuel price reductions and adjustment for reversal of the 2013 Hours of Service changes.  The SCI will fall back into neutral territory and deteriorate as the year progresses, impacted by building regulatory drag, continued freight growth, and upward fuel pricing that could be substantial by mid-year.

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 that conditions for shippers are approaching critical levels, based on available capacity and expected rates.

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

Jonathan Starks, FTR’s Director of Transportation Analysis, commented, “It is tough for a shipper to get a solid view of the underlying costs for truck transportation due to three main factors. First, the dramatic drop in fuel price. This drop has led to an all-in cost (on a per mile basis) nearly equal to last year’s. After telling management for the last year to expect strong increases in transport costs, they now show a near-neutral impact on the bottom line. The second factor is truckload rates which, aside from the drop in fuel, are still increasing. Contract rates (excluding fuel) were up 5-7% versus last year to start 2015. The last factor is the skewed nature of the 2014 data due to the weather-induced capacity crunch of the Polar Vortex. This had the effect of raising rates and delaying shipments. The impact was much more visible in the spot market where rates rose 20% and capacity tightness was at levels never before seen. Data from shows that their Market Demand Index (MDI) averaged 21.2 during 2014, a level that was 45% higher than 2013. We have not had those pressures this winter, and the MDI is back to levels seen during 2013. This is making year-over-year comparisons difficult to use as a reflection of where the market is moving.

“The SCI attempts to aggregate all of those impacts together to help you understand where the current market stands. With the first positive reading since 2010, it is clear that the market has removed several obstacles. Unfortunately for shippers, I expect that the market will quickly move back toward a negative environment as freight growth continues and regulations are enacted that make capacity tight again, moving base rates higher. There is also a strong potential for reversal of the recent reductions in fuel prices. All of these factors point toward a notable decline during the rest of 2015.”

Details of the factors affecting the Shippers Conditions Index along with additional commentary looking at what to expect from the truck market’s current euphoric stage that is typical in late recoveries are found in the February issue of FTR’s Shippers Update published February 8, 2015. 
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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