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Friday, June 21, 2024

Shippers Conditions Improve

FTR Transportation Intelligence’s Shippers Conditions Index for April rose marginally to a reading of 1.5, up from 0.4 in March. The new reading reflects improved market conditions for shippers as freight demand remains sluggish. The SCI is at its highest sustained level since 2011; however, conditions for shippers should reverse in 2017 as fuel prices rise and regulatory drag tightens capacity.

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 April Shippers Conditions Index, along with a close look at market conditions and what might be expected going forward, are found in the June issue of FTR’s Shippers Update published June 9, 2016.

“Even as we have become accustomed to high levels of uncertainty, the recent U.K. vote in favor of ‘Brexit’ has added yet another dose, on top of existing sluggish growth and the possible impact of our own raucous presidential election,” said Larry Gross, partner at FTR. “Our forecast for tightening conditions rests on two keystone assumptions: first, no significant roadblocks or delays in the current looming regulatory timetable; second, no significant further slowing in the already slow-growth economy. The latter item appears to be the bigger risk at the moment, and a pronounced slowdown or recession will postpone or even eliminate any significant tightening in the marketplace.”

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