Tight capacity, rising prices are driving forces in FTR’s Shippers Conditions Index

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Various market conditions left the status of the most recent edition of the Shippers Conditions Index from freight transportation consultancy FTR in a relatively stagnant state.

FTR describes the SCI as an indicator that sums up all market influences that affect the transport environment for shippers, with a reading above zero being favorable and a reading below zero being unfavorable and a “less-than-ideal environment for shippers.”

For July, the most recent month for which data is available, the SCI reading was -0.1, which was in range and slightly below June’s -0.7 reading.

The firm said these levels reflect “the dominance” of contract pricing, coupled with capacity continuing to significantly tighten and subsequently increasing spot market activity, especially in the form of increasing spot market rates.

What’s more, FTR said it expects the SCI to see more downward activity over the rest of 2017 and into 2018, with spot markets continuing to head up and contract prices seeing smaller but notable increases.

“Market conditions through the summer remained relatively subdued, but the environment has changed considerably since then,” said FTR COO Jonathan Starks in a statement. “Prior to Hurricane Harvey, spot market rates were nearing gains of 20% y/y. The latest week puts gains approaching 30%. This will put significant pricing pressure on the contract portion of the market as we move into the 4th quarter. Hurricane disruptions will slowly subside over the next month, but recovery activity will stay elevated for several months. Combine that with the upcoming ELD implementation, elevated fuel prices, and modest acceleration in overall freight demand, and we have a market that is likely to turn much more negative as we finish off 2017 and move into 2018.”

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Article Topics

Capacity &middot

FTR &middot

Rates &middot

SCI &middot

Spot Market &middot

Trucking &middot
All Topics

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