FTR’s Shippers Conditions Index for January Shows Capacity Tightening

The Shippers Conditions Index reached a reading of -3.6, indicating a more challenging shipping environment; however, regulatory drag and solid economic growth forecasts show promise for improved conditions.

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FTR’s Shippers Conditions Index (SCI) for January reflects a more challenging environment for shippers as 2017 gets underway with a -3.6 reading. While capacity is tightening, shippers should be optimistic that regulatory drag will likely be slowed under the new Republican president and congress. However, solid economic growth forecasts in the 2.5% range for 2017 are expected to increase overall costs for shippers.

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. 

Jonathan Starks, Chief Operating Officer at FTR, comments, “The economy is beginning to show signs of some acceleration. Manufacturing is attempting to shrug off its inventory woes, and business confidence has certainly improved, although it hasn't translated into direct investment yet. If sustained, this would raise the outlook for freight demand this year and into next year. While that would cause capacity to tighten, the tailwind is that the regulatory environment isn't expected to have as dramatic an impact as initially thought. Costs, especially rates, are still expected to see increases this year after a relatively weak rate environment in 2016."