BLOOMINGTON, Ind. — FTR’s Shippers Conditions Index (SCI) for January reflects a more challenging environment for shippers and an opportunity for carriers, the analyst firm reported today. The SCI started the year with a -3.6 reading, indicating tightened capacity.
However, FTR noted that “shippers should be optimistic that regulatory drag will likely be slowed under the new Republican president and congress.” But solid economic growth forecasts in the 2.5 percent range for 2017 “are expected to increase overall costs for shippers,” according to FTR.
“The economy is beginning to show signs of some acceleration,” said Jonathan Starks, chief operating officer at FTR. “Manufacturing is attempting to shrug off its inventory woes, and business confidence has certainly improved, although it hasn't translated into direct investment yet. If sustained, this would raise the outlook for freight demand this year and into next year. While that would cause capacity to tighten, the tailwind is that the regulatory environment isn't expected to have as dramatic an impact as initially thought. Costs, especially rates, are still expected to see increases this year after a relatively weak rate environment in 2016."
The SCI is a compilation of factors affecting the shippers transport environment, FTR stated. 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.