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Shippers: Enjoy the Ride While It Lasts

May 24, 2016
Conditions for shippers may have reached their peak, so take advantage of the favorable environment before it begins to taper off in the fall.

That positive vibe you might be feeling right now isn’t a mirage. According to the Shippers Conditions Index (SCI), tracked on a monthly basis by transportation forecasting firm FTR, conditions improved for the fourth month in a row, as of February 2016, when the index rose to 4.7. Any reading above zero indicates favorable conditions for shippers.

FTR’s analysis suggests that the index will remain relatively positive for shippers in 2016 before starting a steady move downward towards year end and likely lasting through 2018 as a regulatory-driven capacity crunch takes hold, save any onset of a recession. Currently, capacity utilization has moderated on all transport modes taking pressure off labor and shipping costs.  FTR’s outlook continues to show a softening in the freight economy through 2016.

“Although the SCI has retreated somewhat it still remains in positive territory,” points out Larry Gross, partner and senior consultant at FRT. “Channel checks with shippers and carriers confirm that relatively favorable conditions from the standpoint of shippers are giving them more sway in carrier negotiations than they have had in some time.”

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