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.”
Material Handling & Logistics is an IndustryWeek companion site within Penton's Manufacturing & Supply Chain Group.
About the Author
Dave Blanchard
Senior Director of Content
Focus: Supply Chain
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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, 2010), which has been translated into several languages and is currently in its second 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.