It may be too soon to say the party is over for shippers, but metaphorically speaking, all the food and drinks have run out and the party’s host has started dimming the lights. FTR’s Shippers Conditions Index (SCI), a measurement of various factors affecting the shippers’ transportation environment, fell back into negative territory in May to a reading of -2.8, following five months of positive (favorable to shippers) readings.
According to FTR’s analysis, market signals remain very mixed with some seasonal increase in spot freight rates negatively affecting the SCI. FTR believes that the index will probably remain close to neutral until Congress decides if and when to reinstate the 34-hour Hours of Service restart rule for truck drivers. Such a reinstatement would constrict capacity, which would result in more negative readings for the SCI.
“Shippers have taken full advantage of the current capacity lull as indications are that the bid season has been difficult for carriers,” says Larry Gross, partner at FTR. “Now rising spot rates may be signaling the start of a slow reversal in circumstances back toward the carriers, but much will depend on whether the regulatory agenda continues to unfold on schedule.”
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.