Shippers Conditions Index reflects continued capacity shortage

Capacity remains tight and that is pushing rates higher according to the latest FTR Shippers Conditions Index (SCI). The SCI for September remained at a reading of -6.6, basically unchanged from August, FTR said.

With sustained capacity tightness and fleets beginning to announce pay increases, the cost to ship goods is expected to remain elevated, the firm added. The typical slowdown in freight tonnage during the winter months will only offer a minor and short-term reprieve with the Shippers Conditions Index expected to remain in the current range for the foreseeable future.

“While truck capacity hasn’t been as bad as we saw during last winter, it has remained tight and, as a consequence, rates have been elevated throughout the year. Recently, concern has moved from capacity on the roads, to problems at the ports. We are seeing potential impacts to retailers Black Friday plans because of the port congestion,” said Jonathan Starks, director of transportation analysis. “To add to the troubles, importers are getting hit with surcharges at the ports. They are dealing with delays in getting goods and additional costs on top of that. If a resolution of the west coast labor dispute or a winter slowdown in freight doesn’t ease the situation, we could have a very tough operating environment in early 2015 for those that are dependent on those ports.”

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.