FTR’s Shippers Conditions Index 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 toward 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.
“Although the SCI has retreated somewhat, it still remains in positive territory,” said FTR Partner and Senior Consultant Larry Gross. “Channel checks with shippers and carriers confirm that relatively favourable 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 clam until the [electronic logging device] mandate approaches as we move into next year.”