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Shippers Conditions Index Improvement for June Reflects Seasonal Freight Growth Pause

08.19.14



FTR’s Shippers Conditions Index (SCI) for June improved a point from the previous month to a reading of -6.5.  The improvement may be short lived, however, as FTR forecasts the index to fall back again in July and, moving forward through the end of the year, settling in a range similar to or lower than May.  Both spot rates and contract rates to move freight are increasing in a full capacity environment, and that is not expected to change.  As the fall shipping season surge comes to fruition, conditions for shippers will only deteriorate more.  


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



Jonathan Starks, FTR’s Director of Transportation Analysis, commented, “While the June SCI moved in a positive way for shippers, it still remains quite negative and highlights that they are operating in a capacity constrained environment. To date in this recovery, aside from the weather-plagued winter of 2014, freight growth has been both fairly stable and relatively modest. This has allowed fleets to operate with very little excess capacity and keep contract rates relatively low as they focused on baseload contracts. This has moved much of the demand fluctuations to the spot market - in which price swings can be much more dramatic. Spot rates have started to show an early upward movement at the end of the summer season, highlighting potential capacity issues as we move into the fall freight shipping season. Contract rates will be moving up, but it will be wise to watch spot rate activity to see how demand and capacity are matching up.”   

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 current economic recovery are found in the August issue of FTR’s Shippers Update published August 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.