FTR May Shippers Conditions Index Falls, Reflecting Rise in Spot Rates

FTR reports the May Shippers Conditions Index fell to a reading of -2.8 due to seasonal increases in spot freight rates, but is expected to remain in neutral territory the remainder of the year.

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FTR’s Shippers Conditions Index (SCI) fell back into negative territory in May to a reading of -2.8, following five months of positive (favorable to shippers) readings. Market signals remain very mixed with some seasonal increase in spot freight rates negatively affecting the SCI. Overall, the index should remain close to neutral until Congress decides if and when to reinstate of the 34-hour restart rule. The reinstatement would constrict capacity resulting in more negative readings for the SCI. 
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.  
Larry Gross, Partner at FTR, comments, “Shippers have taken full advantage of the current capacity lull as indications are that the bid season has been difficult for carriers. Now rising spot rates may be signaling the start of a slow reversal in circumstances back toward the carriers, but much will depend on whether the regulatory agenda continues to unfold on schedule.”