FTR’s Shippers Conditions Index (SCI) for November was marginally better than the previous month at a reading of -8.9. While the index remains in solidly negative territory, its forward-looking components suggest longer term improvement as 2018 matures because of shrinking pressure on capacity from regulations and slower freight growth. However, there is the possibility that conditions could worsen for shippers in the near term as the U.S. economy continues to expand.
The January issue of FTR’s Shippers Update, published January 5, 2018, details the factors affecting the November Shippers Conditions Index, along with commentary covering the history of ELD implementation and the forecasted impact of the now implemented mandate.
Jonathan Starks, Chief Operating Officer at FTR, commented “Truckstop.com’s market demand index began January at record levels, but has moderated throughout the month. This is in line with our understanding that capacity constraints could ease during seasonally weaker Q1. Yet the economy continues to expand and ELD enforcement is still around the corner, so shippers won’t find too much relief in the first half of the year. Markets will adjust as we move through the year; carriers will add some capacity, and shippers will develop more ‘carrier-friendly’ operations. However, that will not stop the market from being severely taxed for a majority of 2018 and prices paid for the transporting of goods will reflect that reality.”
The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem….and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.
For more than two decades, FTR has been the thought leader in freight transportation forecasting in North America. The company’s national award-winning forecasters collect and analyze all data likely to impact freight movement, issuing consistently reliable reports for trucking, rail, and intermodal transportation, as well as providing demand analysis for commercial vehicle and railcar. FTR’s forecasting and specially designed reports have resulted in advanced planning and cost-savings for companies throughout the transportation sector.