FTR’s Shippers Conditions Index shows marginal improvement

The most recent edition of the Shippers Conditions Index (SCI) issued by freight transportation consultancy FTR saw a sequential improvement with the caveat that things remain challenging for shippers.

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 March, the most recent month for which data is available, the SCI came in at -1.7, which is an improvement over February’s -2.8, and January’s -3.6 but not as close to positive readings recorded in November and December at -0.6 and 1.9, respectively.  

FTR explained that softer freight conditions and a view of adequate capacity over the past eighteen months have slowed the expected decline in the SCI, adding that any market-wide tightness reflected in recent tightening of spot rates is currently less than originally thought, with the caveat that there are risks to shippers’ complacency in not being prepared for a crisis in capacity availability that still may happen as ELD and other factors affect the market towards the end of 2017.

“The trucking market still seems to be in a relative balance with enough available capacity to move goods at reasonable pricing,” said FTR COO Jonathan Starks in a statement. “However, that balance is slowly shifting toward the carriers. Spot market load activity is well above levels we saw last year, and spot pricing has recently hit double-digit increases. This pricing increase is partially due to increases in fuel pricing that occurred back in mid-2016, but it is also stemming from a modest reduction in capacity at the same time that load activity has increased. The potential for significant capacity tightness to occur by late 2017 is increasing as the freight environment is strengthening from a resurgence in manufacturing, construction, and industrial activity. Add in a potential capacity reduction due to the Electronic Logging Device (ELD) implementation in December, and the trucking market is poised for a significant change in 2018.”