FTR’s Shippers Conditions Index (SCI) continued to fall in October to a reading of -9.6. Truck rates, both spot and contract segments, have increased for shippers. This is an immediate reflection of the tight truck market.
After the holiday blitz, tight capacity should ease somewhat in Q1 2018, as it typically does, before peaking again in the spring. However, there is additional downside risk to the SCI for early 2018 if contract rates jump substantially or the electronic logging device (ELD) effects are more pronounced than expected.
The December issue of FTR’s Shippers Update, published December 8, details the factors affecting the October Shippers Conditions Index, along with discussion covering expectations for a healthy Class 8 equipment market in 2018.
Eric Starks, Chairman and CEO at FTR, commented, “Conditions for trucking and shipping have been diverging dramatically since the hurricanes hit in August. The hurricanes highlighted the lack of extra capacity available in the system. This has been followed by continued strong freight conditions in Q3 and into Q4. Shippers are really feeling the pinch right now, and there is fear that the ELD mandate will impact capacity in the spring.
“We have essentially hit the 100% capacity mark – there is little, if any excess truck capacity. Add in regulations, continued freight growth, or winter storms and we could be pushing that above 100%. That would leave shippers scrambling to get loads delivered. And that means paying premium rates for those deliveries. It may be a tough first half of 2018 for shippers.”