Wednesday, January 17, 2018

FTR Shippers Conditions Index continues near zero


Monday, October 2, 2017
by THE TRUCKER NEWS SERVICES


FTR said while capacity is tightening noticeably, sharp segmentation trends have pushed the majority of market stress into spot markets. (The Trucker file photo)
FTR said while capacity is tightening noticeably, sharp segmentation trends have pushed the majority of market stress into spot markets. (The Trucker file photo)

BLOOMINGTON, Ind. —  FTR’s Shippers Conditions Index (SCI) for July continued near zero, at a reading of -0.1, reflecting the dominance of contract pricing to the measure.

While capacity is tightening noticeably, sharp segmentation trends have pushed the majority of market stress into spot markets, according to Jonathan Starks, FTR chief operating officer.

FTR forecasts further declines in this index during 2017 and 2018 as spot market prices continue to surge, with smaller, but notable increases coming for the contract market. FTR has modestly revised its late year economics on improved expectations for investment and manufacturing. Hurricane recovery is expected to contribute additional stimulus several months out.

The September issue of FTR’s Shippers Update, published September 10, details the factors affecting the July Shippers Conditions Index along with discussion covering the relationship between strong market conditions and driver shortages.

“Market conditions through the summer remained relatively subdued, but the environment has changed considerably since then,” Starks said. “Prior to Hurricane Harvey, spot market rates were nearing gains of 20 percent year-over-year. The latest week puts gains approaching 30 percent.

“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 electronic logging device 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.”

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 the market conditions that influence the shippers’ freight transport environment.

A positive score represents good, optimistic conditions.

A negative score represents bad, pessimistic conditions.

The index tells the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts someone to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem….and readings high above zero spell opportunity.

Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.

For more information about the work of FTR, visit www.FTRintel.com, follow on Twitter @ftrintel, or call (888) 988-1699, ext. 1.

 

 

 

 

 

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