FTR Shippers Conditions Index shows a slight gain but challenges remain
FTR described the May reading as “benign” and a reflection of only moderately favorable truck freight growth and ongoing weak contract pricing.
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The most recent edition of the from freight transportation consultancy FTR showed a bit of a sequential uptick.
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 May, the most recent month for which data is available, the SCI came in at -1.9, which is an improvement over April’s -3.6.
FTR described the May reading as “benign” and a reflection of only moderately favorable truck freight growth and ongoing weak contract pricing. And it added that spot market pricing has been seeing annual gains over the last several months, although the SCI is expected to see dynamic swings over the next year, due to things like shifts in overall capacity utilization and pricing taking effect as freight demand and regulations alter the landscape to varying levels.
In terms of capacity, FTR said that it is likely to be tighter next January and subsequently easing early in 2019, with the regulatory impact slowing down.
“Shippers conditions continue to be mild. This is in part because the economy hasn’t received the boost from the new Administration which many were hoping for,” said FTR COO Jonathan Starks in a statement. “We are back at the status quo, with moderate growth in both the overall economy and truck freight. Contract pricing remains relatively favorable for shippers. It is only in the spot market, which continues to show strong results on both demand and rates, that we see the signs of changing conditions. We continue to expect implementation of ELDs, coupled with moderate increases in freight, to make for a more fraught environment for shippers. The closer we get to cresting 100% capacity utilization, the more worrisome the problem becomes.”
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