FTR’s Shippers Conditions Index (SCI) continued to improve for the fourth consecutive month to a reading of 4.7 in February.
The measure will remain relatively positive for shippers in 2016 before starting a steady move downward towards year end and likely lasting through 2018 as a regulatory-driven capacity crunch takes hold, save any onset of a recession. Currently, capacity utilization has moderated on all transport modes taking pressure off labor and shipping costs. FTR’s outlook continues to show a softening in the freight economy through 2016.
The Shippers Conditions Index is a compilation of factors affecting the shippers transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below -10 signal conditions for shippers are approaching critical levels, based on available capacity and expected costs. Details of the factors affecting the February Shippers Conditions Index, along with discussion of what durable goods orders mean for the economy are found in the April issue of FTR’s Shippers Update published April 7, 2016.
Larry Gross, Partner and Senior Consultant at FTR commented: “Although the SCI has retreated somewhat it still remains in positive territory. Channel checks with shippers and carriers confirm that relatively favorable conditions from the standpoint of shippers are giving them more sway in carrier negotiations than they have had in some time. We are forecasting a slow deterioration as the year goes on, but tepid demand growth will continue to keep things relatively calm until the ELD mandate approaches as we move into next year.”