FTR’s Shippers Conditions Index (SCI) for May, at -3.1, reflects the current manageable capacity utilization, which is expected to remain in place through 2015. As a result of improved capacity and low fuel prices, shippers are getting a respite from rate increases, an environment which should be maintained throughout the year. However, conditions affecting shippers will deteriorate in 2016 as the pressure from expected new regulations will put a significant drag on capacity.
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. Details of the factors affecting the May SCI, along with an analysis of the significant risks that could affect fleets’ two-year-window forecast, are found in the July issue of FTR’s Shippers Update published July 8, 2015.
“For most domestic shippers it looks like we are nearing the halfway point of reductions in total costs for over-the-road and rail shipping,” said Jonathan Starks, director of transportation analysis at FTR. “Total transit costs, on a year-over-year basis, have been negative since late in 2014 and are expected to turn positive in late 2015 or early 2016. This has given logistics professionals a small amount of breathing room after the crisis levels that were seen during parts of 2014. Unfortunately, they cannot rest easy for long. Although the industrial sector is disappointing, the economy is still growing and the regulatory environment is getting primed for action in 2016 and 2017. This will once again tighten capacity and force another upward shift in truck pricing that will likely filter through to all modes in some fashion.”
Shippers Update, launched by FTR during 2010 as a part of the firm’s Freight Focus series, looks at conditions that will affect the cost and efficiency of shipping goods via all transportation modes. It provides North American shippers information they need on freight volumes, equipment capacity, transport costs and rates.
