FTR Shippers Conditions Index stable in modestly negative territory

FTR Associates’ Shippers Conditions Index (SCI) for April showed a slight improvement from the previous month to a reading of -6.9. Still, it was in negative territory, an indication that rate increases probably are on the horizon.

Overall, truck freight is showing improved growth but with fleets managing productivity, there are no serious capacity issues yet and rates continue to move very slowly. FTR expects a significant acceleration in rates when the market responds to hours of service changes in July. However this reaction may take several months to trickle down to shippers. Details of the factors affecting the April Shippers Conditions Index are found in the June issue of FTR’s Shippers Update published June 12.

Lawrence Gross, senior consultant for FTR, cautions: “We are standing at the edge of the hours of service revision that should initiate tightening in the truck freight sector. However, at the same time, while the economy is continuing to slowly grow, the manufacturing segment that forms a key component driving truck freight demand, is faltering. If this continues, it may take out a bit of this year’s anticipated second-half rate sting.”

The Shippers Conditions Index is a compilation of factors affecting 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.

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