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FTR’s February Shippers Conditions Index Shows Strong Freight Demand and Unfavorable Shipping Environment

04.26.18 | FTR


The February Shippers Conditions Index reading from FTR was unchanged from January at -11.1, reflecting an unfavorable environment for shippers. Regulatory pressures are rising, and the capacity required for a hot freight market was slow to increase in the first quarter, putting pressure on rates. Freight growth during the first quarter typically softens after a strong holiday season, but not in 2018. FTR’s truck loadings index is expected to see growth of 4% to 6% y/y into 2019. A continued capacity crunch in the truckload segment could result in bleed-over of freight volume to LTL which would further increase shippers’ costs. 


Click here to view the latest release and an interactive graph of the SCI>


Jonathan Starks, Chief Operating Officer at FTR, commented, “Shippers remain in the throes of a pro-carrier environment. Every major indicator of demand--manufacturing, payroll employment, retail sales, housing construction-- is at least at the strongest level since the Great Recession. Unemployment is at a 17 year low, and the driver shortage continues to create capacity constraints."

“Rates on the spot market continue to remain elevated, and we don’t expect to see any significant downward rate pressure - whether spot or contract - until at least 2019. Shippers should not expect to get near-term relief from spot rates that are at or near record levels. Securing capacity at a reasonably higher price remains the key challenge for shippers.”

Todd Tranausky, Senior Research Analyst at FTR, commented, “Intermodal rates are expected to follow truck rates higher and grow at more than 5% compared with the 2017 period through the balance of the year. The next few months will see rates grow even faster, leaving shippers paying more to move their goods in a tight freight market.”

The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem...and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.

For more information about how to subscribe to the Shippers Update, send an e-mail to hlile@ftrintel.com or call Helen Lile at (888) 988-1699 ext. 1 and follow us on Twitter @FTRintel.


The Shippers Update, launched by FTR during 2010 as a part of the firm’s Freight Focus, looks at conditions that will affect the cost and efficiency of shipping goods via all transportation modes. North American shippers will find in one reference the essential information they need on freight volumes, equipment capacity and transport costs and rates.

The Shippers Update has both history and forecasts for four modal options: truckload, less-than-truckload, intermodal and rail carload. The analysis includes the breakdown of total truck and rail volumes into major commodity segments. It also provides historical snapshots of inland water and air freight markets. The freight data is augmented by an abundant collection of supporting data covering macro-economics and the fuel market.
 
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About FTR
For more than two decades, FTR has been the thought leader in freight transportation forecasting in North America. The company’s national award-winning forecasters collect and analyze all data likely to impact freight movement, issuing consistently reliable reports for trucking, rail, and intermodal transportation, as well as providing demand analysis for commercial vehicle and railcar. FTR’s forecasting and specially designed reports have resulted in advanced planning and cost-savings for companies throughout the transportation sector.