Subscribe to our free, weekly email newsletter!


FTR Shippers Conditions Index remains in a holding pattern

By Jeff Berman, Group News Editor
July 29, 2014

Following a slight improvement in its previous edition, the most recent edition of the Shippers Conditions Index (SCI) from freight transportation forecasting firm FTR shows that current market conditions for shippers appear to be in a holding pattern.

FTR describes the SCI as an indicator that sums up all market influences that affect shippers, with a reading above zero being favorable and a reading below zero being unfavorable and a “less-than-ideal environment for shippers.”

For May, which is the most recent month for which data is available, the SCI is -7.5, following April’s -7.5. FTR said this reading represents a still-tight capacity environment, as utilization rates hover between 98 percent and 99 percent. And the firm added that increases on labor costs and purchased transportation are expected to push shippers’ costs up through year-end, while truckload spot market rates continue to rise, which was expected, coupled with increases in contract prices.

“Although shippers are not struggling to find capacity as they were during the storms earlier in the year, capacity remains tight for both truck and rail,” said FTR President Eric Starks in a statement. “The driver shortage continues to limit trucking, while service levels on the rails have been an issue. Shippers are increasingly pressured to maximize capacity by collaborating with carriers to increase productivity.”

Starks said in a recent interview with LM that the current situation is interesting in that things continue to be strong in a sense that capacity is relatively tight but not critical in any way, while rate pressure on the truckload side remains intact.

But he noted that there is a caveat with some of the issues shippers were dealing with earlier in the year, notably the harsh winter weather, have abated.

“The winter created a huge capacity crunch as shippers were scrambling to find equipment,” he explained. “That is over now, buy the driver shortage situation remains an issue and is a major problem that carriers really cannot stress enough. We are kind of at an odd spot right now, because it really won’t take much of an economic pick up to push us back to that critical spot again where we were last winter. If we start seeing the economy heating up at all, it could create some problems as things are already on the edge.”

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


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!

Recent Entries

When an industry is changing rapidly, companies must adapt in order to survive. In this whitepaper, a global publisher was seeking a partner that could mitigate risk and build a platform flexible enough for their shifting customer expectations. The solution enabled the company to rewrite their operations game plan and transform their supply chain.

Global trade management technology provider Amber Road (formerly known as Management Dynamics) said this week it has acquired ecVision, a cloud-based provider of global sourcing and collaborative supply chain solutions.

While it is already reaping myriad benefits from ORION (On-Road Integrated Optimization and Navigation), a proprietary routing platform for its drivers rolled out in late 2013, transportation and logistics bellwether UPS announced big plans for the technology this week.

Diesel prices continued their recent stretch of gains with a 3.6 cent increase this week to $2.936 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

TSA has reaffirmed its March 9 general rate increase (GRI) of $600 per 40-foot container (FEU) for all shipments, and lines have also filed a previously announced April 9 GRI in the same amount.

Article Topics

News · FTR · SCI · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA