FTR’s Shippers Conditions Index tells a tough story for shippers
Tight capacity, coupled with ongoing rate pressures, continue to be major themes in shipping circles.
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Tight capacity, coupled with ongoing rate pressures, continue to be major themes in shipping circles, based on the findings in the most recent edition of the from freight transportation consultancy .
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 came in at 13.4, which slipped further in negative territory over March’s -10.5 reading.
FTR said this demonstrates how there has been a lack of capacity and rate relief for shippers in what continues to be a very strong freight environment. And it added that April “may be the nadir in this cycle as conditions likely will not get significantly worse for shippers over the balance of the year.”
And it added that the annual rate growth level is close to near-term peak, with shippers potentially seeing some stabilization in 2019 as more capacity comes on line. That said, FTR explained there is no expectation for lower rates on an absolute basis until at least late 2019. Total shipping costs, with transportation the largest share, are forecast to rise an estimated 12% annually in 2018, with another 5% increase expected in 2019.
“Shippers facing significant increases in rates for truck and rail intermodal movements have not yet seen relief,” said in a statement. “However, record truck orders should begin hitting the market in the second half of the year, and we are closely watching the driver situation, which will determine if shippers see improvements as the trucks become available.”
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