FTR’s Shippers Conditions Index (SCI) improved for the third consecutive month to a 4.3 reading in January. The SCI is in positive territory as favorable market conditions from 2015 continue into 2016. Capacity now is sufficient to meet the demands of the current market. However, the index is forecast to drop into negative territory later in the year as worries mount about likely capacity shortages in 2017.
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.
“We are now experiencing the first sustained period of favorable shipping conditions since 2009,” says Larry Gross, a Partner at FTR. “Slow industrial growth and adequate capacity in all modes are combining to create this situation. Positive shipper conditions would continue indefinitely based solely on our economic forecast, but the addition of the regulatory component changes the equation. We expect conditions to begin to deteriorate from a shipper standpoint as we move through the year and begin to approach the ELD (electronic logging devices) deadline, as well as other regulatory developments.”