In the Spirit of Optimism, Let’s Just Say Shipping Conditions Are Less than Optimal

April 9, 2014
Spring is in the air, so should we let ourselves get overly concerned that the Shippers Conditions Index has dropped to its lowest point in a year?

Spring is in the air, most of the snow has melted, the birds are chirping, the new baseball season is underway… should we really let ourselves get overly concerned that the Shippers Conditions Index has dropped to its lowest point in a year? The SCI, a compilation of factors affecting the shippers transport environment tracked by transportation analyst firm FTR, had a reading of -8.8 for the month of February 2014, the lowest since the index dropped to -9.4 in February 2013. Just a month ago, the SCI was at -6.3, so the index plunged 2.5 points since January (see SCI chart below).

With the SCI, 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.

According to Jonathan Starks, FTR’s director of transportation analysis, lousy weather had a lot to do with deterioration in the SCI. Shippers experienced an earlier-than-normal tightening of capacity that was a result of the debilitating effects of winter storms. “Most of the components in the SCI are only slightly negative (freight, costs, and fuel),” Starks notes. “The main drag comes from the very tight capacity situation that was highlighted this winter.”

FTR’s analysis points to some improvement later in the year, though 2014 looks to be a very volatile year for shippers. “This is a year to closely monitor signs for an economic uptick because it could have quick impacts on the transport sector,” Starks says. “If the economy stays stuck in slow-growth mode and the weather finally behaves, we can expect the extremely tight capacity to normalize by mid-summer. If, however, we can finally get some additional economic activity, especially in the vital manufacturing sector, the tight truck environment will persist and could significantly worsen. Now is a time for careful planning for the quickly approaching fall shipping season.”

About the Author

Dave Blanchard | Senior Director of Content

During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeek, EHS Today, Material Handling & Logistics, Logistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

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