February Shippers Conditions Index Reflects Moderate Market Conditions

FTR’s Shippers Conditions Index (SCI) for February reflects somewhat moderate market conditions early in 2017 with a reading of -2.8. While February’s reading is less negative than January, FTR expects a tightening market late in the year with an increasingly negative SCI which reflects that. The moderation of FTR’s regulatory forecast will be offset by an expected increase in freight demand as economic growth improves.

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 SCI compiles four key metrics into a singular view of how the market is operating. It keys in on freight demand, transport utilization levels, transport costs, and fuel pricing. In February, there was little change in most of these metrics aside from fuel pricing. Diesel fuel prices dropped a slight amount in February after jumping 7 cents in January, and the outlook for pricing is for relative stability during most of 2017.

“The biggest drag on the index continues to be the impact of the tightening capacity environment that we have seen emerge over the last 9-12 months. The spot market gives us a quick indication of this tightening, with the Market Demand Index (MDI) from Truckstop.com up more than 80% versus February of 2016.”