FTR’s Shippers Conditions Index sees a decline

The Shipper’s Conditions Index (SCI) from freight transportation consultancy FTR took a step back in in its most recent edition.

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

For April, the most recent month for which data is available, the SCI was -3.6, which FTR called a modest deterioration and leaves it in a soft negative range of tightening capacity utilization that reflects the ability of shippers to fend off pricing increases from their contract carriers.

March’s reading was -1.7 and was preceded by a -2.8 reading in February and January’s -3.6.

Looking ahead, FTR said it expects the SCI to see further declines this year, with capacity tightening further from an unexpected consumer bounce back on the heels of a sluggish first quarter, adding it does not expect the SCI to fall into double-digit negative range over this period.

“Strengthening economics are increasing the chance of capacity tightness late this year and into 2018,” said FTR COO Jonathan Starks in a statement. “Despite the growing pressures from the market, the index has remained relatively stable, a testimony to the ability of contract trucking to sustain ever higher levels of capacity utilization without strong pricing pressure. The major takeaway here is the difference in prospect for contract and spot market players. Flexibility will be important, as changing market conditions in 2018 could easily invalidate budgets created in 2017. Notably, shippers will not be able to easily expand their baseload contract coverage to avoid spot market volatility.”