The freight transportation analyst said its Shippers Conditions Index is at its highest sustained level since 2011, but conditions for shippers should reverse in 2017, as fuel prices increase and regulatory drag tightens capacity.
Freight transportation analyst FTR’s Shippers Conditions Index (SCI) in April rose to a reading of 1.5, up from a reading of 0.4 in March, a reflection of improved market conditions for shippers as freight demand remains sluggish, the firm said.
A reading below zero indicates a less-than-ideal environment for shippers, while a reading below -10 signals that conditions for shippers are approaching critical levels, based on available capacity and expected rates.
Although the SCI is at its highest sustained level since 2011, FTR said conditions for shippers should reverse in 2017, as fuel prices increase and regulatory drag tightens capacity. Several factors have added to high levels of uncertainty, including the United Kingdom’s vote to leave the European Union, existing sluggish growth and the possible impact of our presidential election, Larry Gross, Partner at FTR said.
“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,” Gross said. “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.”
FTR: Shippers Conditions Index rises in April
