FTR’s Shippers Conditions Index fell back into negative territory in May to a reading of -2.8, following five months of positive (favourable to shippers) readings. Market signals remain very mixed with some seasonal increase in spot freight rates negatively affecting the SCI. Overall, the index should remain close to neutral until Congress decides if and when to reinstate of the 34-hour restart rule. The reinstatement would constrict capacity resulting in more negative readings for the SCI.
“Shippers have taken full advantage of the current capacity lull as indications are that the bid season has been difficult for carriers,” said Larry Gross, partner at FTR. “Now, rising spot rates may be signalling the start of a slow reversal in circumstances back toward the carriers, but much will depend on whether the regulatory agenda continues to unfold on schedule.”
The SCI 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 May Shippers Conditions Index, along with a close look at what BREXIT means for the U.S. transportation industry, are found in the July issue of FTR’s Shippers Update published July 8, 2016.