Shippers Conditions Index for July Worsens Reflecting Increasing Transportation Costs


FTR’s Shippers Conditions Index (SCI) for July fell 1.3 points from the previous month to a reading of -7.8, reflecting tightening truck capacity and a strong upward move in contract pricing ahead of the fall shipping surge. Contract markets are beginning to show their first significant reaction to the driver shortage which is increasingly impacting truck fleet capacity. Spot rates remain high as well. Field reports support FTR forecasts of increasing labor and purchased transportation costs. The Shippers Conditions Index is expected to remain in the current range for the foreseeable future as long as freight growth continues.

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

Jonathan Starks, FTR’s Director of Transportation Analysis, commented, “The challenges in the industry continue as we head into the fall shipping season. FTR just concluded its annual transportation conference, and our numerous interactions with shippers, truck fleets, and railroads only enhanced our conviction that the freight transportation markets remain strained. The silver lining is that the industry will be able to handle most of these challenges with only limited capacity shortages. The downside is that truck rates are continuing to move higher and are unlikely to stop that momentum this year.  Also, even though outright shortages will be limited, it will take even more work, and possibly delays, to get your non-optimized loads moved. For the railroads, service issues and slow speeds are likely to continue until the winter - when volumes slow and the railroads will finally be able to add in some additional crews.”

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 discussing the pending capacity crisis, including the impact of the current driver shortage, are found in the September issue of FTR’s Shippers Update published September 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 (888) 988-1699 ext. 1.