FTR Shippers’ Condition Index at lowest level since 2004

As various factors such as increasing diesel prices, tight capacity, and rate pressure continue to take hold in the freight transportation market, they appear to be taking a toll on shippers, according to the April edition of the Shippers’ Condition Index (SCI) released this week by freight transportation consultancy FTR Associates.

By ·

As various factors such as increasing diesel prices, tight capacity, and rate pressure continue to take hold in the freight transportation market, they appear to be taking a toll on shippers, according to the April edition of the Shippers’ Condition Index (SCI) released this week by freight transportation consultancy FTR Associates.

The SCI’s current reading of -7.7 indicates what the firm described as “continued deterioration,” with the outlook for capacity shortages getting worse. FTR bases the SCI on “all market influences that affect shippers,” with a reading of zero reflecting a solid environment and anything below zero an unfavorable environment.

FTR officials said that the SCI is approaching levels that have not been seen since 2004, which was a difficult time for shippers. They added that shippers are currently feeling the impact of tighter capacity, with base rates for major modes—and their respective fuel surcharges—on the rise, adding that while they may see relief on fuel surcharges later in the year base rates are likely to continue heading up.

In an interview with LM, FTR Senior Consultant Larry Gross said that what is currently happening when it comes to rates is essentially a carrier—or supplier—market.

“There is no question about that, but it is not being done in a vindictive way,” said Gross. “This is just the way supply and demand works, and right now we are going to go into a period of tight supply, which means that pressure is going to be on the shippers.”

And with driver ability being the true key to capacity and the situation continues to tighten, Gross explained that carriers are going to be looking “very differently” at shippers that provide them the opportunity to make good use of their drivers compared to shipper customers that don’t make good use of drivers.

An example of the latter would be a shipper that experiences routine delays or has shipments tied up at loading dock, which from a carrier’s standpoint is undesirable and waste drivers’ time.

“That type of shipper is going to find it a whole lot more difficult to get capacity, and it will get more expense for them to get freight moved, with carriers becoming more discriminating,” said Gross. “Shippers are not helpless here; they can do things that are going to help them during this tight capacity situation.”

For related articles, please click here.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
The Essential Guide to High Value, Low TCO WMS on the Fast Track
A warehouse could become your weakest link if you can’t execute with speed and accuracy. Your bottom line will be negatively impacted, so will your customer’s experience, and they are only one click away from buying from your competitors!
Download Today!
From the November 2017 Logistics Management Magazine Issue
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships into true, collaborative partnerships—and greatly strengthened its logistics and supply chain operations in the process.
34th Annual Quest for Quality Awards: 2017 Awards Dinner
Trucking Regulations: Washington U-Turns; States put hammer down
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Make Your Products Smarter in the Supply Chain with the IoT
This webinar explores how temperature-sensing smart labels and inexpensive NFC tags are being used to extend product safety and efficiency beyond the shipping dock while also building a communication bridge to your customers.
Register Today!
EDITORS' PICKS
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...