Shipping

Tough Environment Continues for Shippers

One bright spot, however, is that the hard enforcement of the ELD regulation, based on spot-market data, does not appear to have had a major impact.

Conditions remain highly unfavorable with tight capacity and rising rates in both truckload and intermodal sectors, according to the March Shippers Conditions Index from FTR.

The reading remained in double-digit negative territory at -10.5 reflecting the continued tough environment facing shippers.  Shippers may see some relief after the second quarter and conditions may improve further during Q4.  One bright spot for shippers is that the hard enforcement of the ELD regulation, based on spot-market data, does not appear to have had a major impact.

 
“Economic indicators look solid, freight demand continues to rise, and FTR sees no significant slowdown through 2019 for these conditions,” said Jonathan Starks, chief intelligence officer at FTR, commented. “Indeed, spot market rates are setting new record highs as the peak shipping season comes into full swing.”
 
The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Shippers Conditions Index warns you of a problem...and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double-digit readings (both up or down) are warning signs for significant operating changes.

 “Although negative conditions persist for shippers, the latest month saw some stabilization,” said Todd Tranausky, senior research analyst at FTR. “However, the combination of tight truck capacity and challenging rail service is unlikely to abate in the near term. Shippers need to plan on coping with these difficult conditions for a sustained period.”

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