FTR: Shippers get respite from rate increases for now

July 29, 2015
Conditions projected to deteriorate in 2016

FTR’s Shippers Conditions Index (SCI) for May, at -3.1, reflects the current manageable capacity utilization, which is expected to remain in place through 2015.

As a result of improved capacity and low fuel prices, shippers are getting a welcome respite from rate increases.  This environment should be maintained throughout the year.  However, conditions affecting shippers will deteriorate in 2016 as the pressure from expected new regulations will put a significant drag on capacity, FTR reports.

The SCI 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. Details of the factors affecting the May Shippers Conditions Index, along with an analysis of the significant risks that could affect fleets’ two-year-window forecast, are found in the July issue of FTR’s Shippers Update published July 8.

Jonathan Starks, director of transportation analysis at FTR, said, “For most domestic shippers it looks like we are nearing the halfway point of reductions in total costs for over-the-road and rail shipping. Total transit costs, on a year-over-year basis, have been negative since late in 2014 and are expected to turn positive in late 2015 or early 2016. This has given logistics professionals a small amount of breathing room after the crisis levels that were seen during parts of 2014. Unfortunately, they cannot rest easy for long. Although the industrial sector is disappointing, the economy is still growing and the regulatory environment is getting primed for action in 2016 and 2017. This will once again tighten capacity and force another upward shift in truck pricing that will likely filter through to all modes in some fashion.”

Shippers Update, launched by FTR during 2010 as a part of the firm’s Freight Focus series, looks at conditions that will affect the cost and efficiency of shipping goods via all transportation modes. North American shippers will find, in one reference, the essential information they need on freight volumes, equipment capacity, and transport costs and rates.

Shippers Update has both history and forecasts for four modal options: truckload, less-than-truckload, intermodal, and rail carload. The analysis includes the breakdown of total truck and rail volumes plus intermodal. The freight data is augmented by an abundant collection of supporting data covering macroeconomics and the fuel market.

Sponsored Recommendations

Tackling the Tech Shortage: Lessons in Recruiting Talent and Reducing Turnover

Discover innovative strategies for recruiting and retaining tech talent in the trucking industry at our April 16th webinar, where experts will share insights on competitive pay...

Stop Sweating Temperature Excursions

Advanced chemical indicators give you the peace of mind that comes from reliable insights into your supply chains. Compromised shipments can be identified the moment they arrive...

Stop Sweating Temperature Excursions

Advanced chemical indicators give you the peace of mind that comes from reliable insights into your supply chains. Compromised shipments can be identified the moment they arrive...

How Electric Vehicles Help You Prolong the Life of Your Fleet

Before adopting electric vehicles for commercial/government fleets, prioritize cost inquiries. Maintenance is essential; understand the upkeep of EV fleets. Here’s what you need...

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!