Challenges remain in store for shippers, says FTR SCI report

The most recent edition of the Shippers Conditions Index (SCI) from freight transportation consultancy FTR issued this week points to a “more challenging environment” for shippers in early 2017.

FTR describes the SCI as an indicator that sums up all market influences that affect the transport environment for shippers, with a reading above zero being favorable and a reading below zero being unfavorable and a “less-than-ideal environment for shippers.”

For January, the most recent month for which data is available, the SCI was -3.6, which is down considerably from December’s 1.9 and November’s -0.6 and in line with October’s -3.1.

FTR said that this reading is a reflection of how capacity is starting to get tighter, but on a more positive note it added that shippers should be more optimistic of the prospect of regulatory drag slowing under the Trump administration and a Republican Congress. And it added that with GDP forecasted at 2.5 percent for this year, it could lead to higher over all costs for shippers.

“The economy is beginning to show signs of some acceleration,” said FTR COO Jonathan Starks in a statement. “Manufacturing is attempting to shrug off its inventory woes, and business confidence has certainly improved, although it hasn't translated into direct investment yet. If sustained, this would raise the outlook for freight demand this year and into next year. While that would cause capacity to tighten, the tailwind is that the regulatory environment isn't expected to have as dramatic an impact as initially thought. Costs, especially rates, are still expected to see increases this year after a relatively weak rate environment in 2016.”