FTR’s Shippers Conditions Index trends down

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Various market factors continued to drive down the Shippers Condition Index (SCI), which was released this week by freight transportation consultancy FTR.

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 October, the most recent month for which data is available, the SCI was -9.6, following September’s -8.2 and August’s -6.7.

FTR said this reading is a byproduct of rising spot and contract truck rates, coupled with a tight trucking market. Looking ahead, it said that after the holidays, tight capacity should ease somewhat in Q1 2018, as it typically does, before peaking again in the Spring. But it cautioned, however, there is additional downside risk to the SCI for early 2018 if contract rates jump substantially or the electronic logging device (ELD) effects are more pronounced than expected.

“Conditions for trucking and shipping have been diverging dramatically since the hurricanes hit in August,” Eric Starks, Chairman and CEO at FTR, said in a statement. “The hurricanes highlighted the lack of extra capacity available in the system. This has been followed by continued strong freight conditions in Q3 and into Q4. Shippers are really feeling the pinch right now, and there is fear that the ELD mandate will impact capacity in the spring. We have essentially hit the 100% capacity mark – there is little, if any excess truck capacity. Add in regulations, continued freight growth, or winter storms and we could be pushing that above 100%. That would leave shippers scrambling to get loads delivered. And that means paying premium rates for those deliveries. It may be a tough first half of 2018 for shippers.”

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