2014 may be a very volatile year requiring increased shipper attention to market conditions. FTR’s Shippers Conditions Index for February, at a reading of -8.8, reflects an earlier than normal tightening of capacity created by the debilitating effects of winter storms in early 2014. Conditions are expected to improve from this low point if a slowing of freight growth persists, however, shippers are advised to acquire sufficient capacity until after the spring seasonal shipping peak.
Jonathan Starks, FTR’s director of transportation analysis, commented: “Most of the components in the Shippers Conditions Index are only slightly negative (freight, costs, and fuel). The main drag comes from the very tight capacity situation that was highlighted this winter.
"This is a year to closely monitor signs for an economic uptick because it could have quick impacts on the transport sector. If the economy stays stuck in slow-growth mode and the weather finally behaves, we can expect the extremely tight capacity to normalize by mid-summer," he said. "If, however, we can finally get some additional economic activity, especially in the vital manufacturing sector, the tight truck environment will persist and could significantly worsen. Now is a time for careful planning for the quickly approaching fall shipping season.”
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.