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When Not-So-Good Is Good Enough

Nov. 10, 2015
Shippers conditions have settled into a comfortable rut best described as so-so, neither good nor bad, neither great nor horrible.

After many long months of outright lousy conditions for shippers, the situation has changed quite remarkably in 2015. Today, shippers conditions can accurately be described as so-so, neither good nor bad, neither great nor horrible, according to freight transportation forecasting firm FTR.

FTR’s Shippers Conditions Index (SCI) for August 2015 came in at -0.8, not quite reaching the zero threshold separating positive from negative condition. However, FTR cautions that while truckload rate acceleration pretty much has been a non-factor this year, shippers should expect a more challenging environment come the new year. And it could get even worse if, as FTR expects, the increasing regulatory drag on capacity shifts into full throttle in 2017.

“Shippers are currently receiving the benefit of relatively slow growth in transport demand coupled with adequate transport capacity, resulting in a relatively placid peak season in 2015,” says Larry Gross, senior consultant at FTR. “However, we continue to expect that conditions will tighten significantly beginning next year as the next wave of trucking regulations begins to hit. There is also the potential for congressional action as part of the possible highway trust fund reauthorization bill which is injecting another major element of uncertainty.”

Characterizing the logistics outlook as “unusually volatile and uncertain,” Gross advises shippers to keep a close eye on the situation.

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.

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