FTR’s Shippers Conditions Index (SCI) for April improved significantly to a reading of -0.7 after a sharp decline in the previous month. However, FTR analysts say they believe the rise in the index for April, impacted by the temporary cessation of regulatory drag and drops in fuel pricing, will be short lived.
These positive conditions for shippers are expected to evaporate as a result of an expected rise in diesel prices and the building of regulatory drag over the next couple of years on market capacity.
Larry Gross, FTR Senior Consultant, said: “Shippers are in what might be considered ‘the eye of the storm’ right now. After a very tight situation last year, conditions have eased as economic growth has slowed while truck capacity is relatively abundant following the Congressional roll-back of the 34-hour reset regulation. Additionally, fuel prices are down. We see little probability of any big near-term increase in demand, but capacity will inevitably begin to tighten once again next year, even at current demand levels, as the implementation date of more new safety regulations including the ELD mandate draws nearer.”
The Shippers Conditions Index is a compilation of factors affecting the shippers transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below 10 signal that conditions for shippers are approaching critical levels, based on available capacity and expected rates. Details of the factors affecting the April Shippers Conditions Index, along with an in-depth look at current freight conditions, are found in the June issue of FTR’s Shippers Update published June 8.