FTR’s Shippers Conditions Index remains low

FTR reported that its Shippers Conditions Index for May was basically unchanged from April, registering a low reading of -7.5. The reading reflects continuing tight capacity with utilization rates holding between 98% and 99%, the firm said.

Increases in labor costs and purchased transportation will drive shippers’ cost upwards throughout the remainder of the year, FTR added. Spot rates for truckload freight have risen as expected with increases in contract prices anticipated with July reports. 

“Although shippers are not struggling to find capacity as they were during the storms earlier in the year, capacity remains tight for both truck and rail. The driver shortage continues to limit trucking, while service levels on the rails have been an issue. Shippers are increasingly pressured to maximize capacity by collaborating with carriers to increase productivity,” said Eric Starks, president. 

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 Shippers Conditions Index, along with additional commentary discussing oil prices and how they may impact the economy and trucking, are found in the July issue of FTR’s Shippers Update published July 9, 2014.