FTR’s Shippers Conditions Index (SCI) for August, at a reading of -0.8, continues to reflect the moratorium in TL rate growth over the summer. However, the current soft level in the SCI is still below equilibrium, with the slightly negative reading.
Shippers should expect a more challenging environment in 2016 in anticipation of the increasing regulatory drag on capacity expected to get into full throttle in 2017.
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 that conditions for shippers are approaching critical levels, based on available capacity and expected rates. Details of the factors affecting the August Shippers Conditions Index, along with a highlights from the annual FTR Transportation Conference are found in the October issue of FTR’s Shippers Update published October 8, 2015.
Larry Gross, Senior Consultant at FTR, commented, "Shippers are currently receiving the benefit of relatively slow growth in transport demand coupled with adequate transport capacity, resulting in a relatively placid peak season in 2015.
“However, FTR continues to expect that conditions will tighten significantly beginning next year as the next wave of trucking regulations begins to hit. There is also the potential for congressional action as part of the possible highway trust fund reauthorization bill which is injecting another major element of uncertainty. Shippers would be well served to keep a close eye on the situation. FTR will continue to provide guidance to its subscribers to help make sense of an unusually volatile and uncertain outlook."