FTR’s Shippers Conditions Index (SCI) for April rose marginally to a reading of 1.5 — up from 0.4 in March. The new reading reflects improved market conditions for shippers as freight demand remains sluggish.
The SCI is at its highest sustained level since 2011; however, conditions for shippers should reverse in 2017 as fuel prices rise and regulatory drag tightens capacity.
Larry Gross, partner at FTR, said, “Even as we have become accustomed to high levels of uncertainty, the recent U.K. vote in favor of Brexit has added yet another dose, on top of existing sluggish growth and the possible impact of our own raucous presidential election.
“Our forecast for tightening conditions rests on two keystone assumptions: first — no significant roadblocks or delays in the current looming regulatory timetable. Second — no significant further slowing in the already slow-growth economy. The latter item appears to be the bigger risk at the moment, and a pronounced slowdown or recession will postpone or even eliminate any significant tightening in the marketplace.”
The SCI is a compilation of factors affecting the shippers transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below minus-10 signal conditions for shippers are approaching critical levels, based on available capacity and expected costs.