FTR: Shipping Conditions Index remains in negative territory
Date: Friday, February 2, 2018
Source: American Shipper
The Shippers Conditions Index, which tracks the changes in major conditions for the U.S. full-truckload freight market, continued to fall in November, reaching a “solidly negative” reading of -8.9, freight transportation intelligence firm FTR reported Wednesday.
The number was actually marginally better than the previous month’s reading of -9.6.
“While the index remains in solidly negative territory, its forward-looking components suggest longer term improvement as 2018 matures because of shrinking pressure on capacity from regulations and slower freight growth,” FTR explained in a statement. “However, there is the possibility that conditions could worsen for shippers in the near term as the U.S. economy continues to expand.”
The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market: freight demand, freight rates, fleet capacity and fuel price. The individual metrics are combined into a single index that tracks market conditions influencing the shippers’ freight transport environment.
A positive score represents good, optimistic conditions, while a negative score represents bad, pessimistic conditions. A reading well below zero warns of a problem, a reading high above zero spells opportunity, readings near zero are consistent with a neutral operating environment, and double digit readings either up or down are warning signs for significant operating changes.
FTR Chief Operating Officer Jonathan Starks said that the truckstop.com spot market index tool has shown slowing demand since the beginning of the year.
“Truckstop.com’s market demand index began January at record levels, but has moderated throughout the month. This is in line with our understanding that capacity constraints could ease during seasonally weaker Q1,” Jonathan Starks commented. “Yet the economy continues to expand and ELD (electronic logging device) enforcement is still around the corner, so shippers won’t find too much relief in the first half of the year.”
Looking ahead, Starks predicted, “Markets will adjust as we move through the year; carriers will add some capacity, and shippers will develop more ‘carrier-friendly’ operations. However, that will not stop the market from being severely taxed for a majority of 2018 and prices paid for the transporting of goods will reflect that reality."
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