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Today’s Pickup: Conditions for shippers improving slightly

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Good day,

Conditions improved slightly for shippers in November according to FTR’s Shippers Conditions Index (SCI). The SCI recorded a -8.9 for November, slightly better than October but still solidly negative, the firm said.

“Truckstop.com’s market demand index began January at record levels but has moderated throughout the month. This is in line with our understanding that capacity constraints could ease during seasonally weaker Q1. Yet the economy continues to expand and ELD enforcement is still around the corner, so shippers won’t find too much relief in the first half of the year,” said Jonathan Starks, COO. “Markets will adjust as we move through the year; carriers will add some capacity, and shippers will develop more ‘carrier-friendly’ operations. However, that will not stop the market from being severely taxed for a majority of 2018 and prices paid for the transporting of goods will reflect that reality.” 

Any reading below zero represents pessimistic conditions for shippers. FTR did note that while the index remains negative, forward-looking components suggest improvement as 2018 moves along as “shrinking pressure on capacity from regulations and slower freight growth” take hold.

The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions.

Did you know?

According to a survey from the American Chamber of Commerce in China, 46% of U.S. companies believe the Chinese government will open up that country to more foreign investment this year.

Quotable:

“It’s very important to maintain a strong federal role when we talk about infrastructure investment. Not only does this [administration] plan lean heavily on public-private partnerships, but it leans on state and local governments to come up with enormous matches.”

- Elaine Nessle, executive director of the Coalition for America’s Gateways and Trade Corridors, talking to the Wall Street Journal

In other news:

Trump infrastructure plan meets cool reception

President Trump’s lack of details on how to fund a $1.5T infrastructure investment has left trucking groups dismayed. (Wall Street Journal)

Interest rates hold steady

The Federal Reserve chose not to increase short-term interest rates Wednesday, but a rate hike remains likely in March. (Wall Street Journal)

Volvo reports strong truck orders

Volvo Group, which includes U.S. truck makers Volvo and Mack, reported a 29% increase in global truck orders in the fourth quarter and has raised its outlook for 2018. (Reuters)

Air cargo up 9%

Global air cargo for 2018 rose 9% in its best year since 2010. The increase was double the 4.3% increase in 2016. (DC Velocity)

Fewer long-haul drivers than believed

A new federal report says that there are fewer than 2.1 million long-haul truck drivers, far below some estimates of 3.5 million. (Trucks.com)

Final Thoughts

FTR’s Shippers Conditions Index improved slightly in November, although it still remains solidly against shippers. It is one of the first signs that the leverage carriers currently have may be starting to slip a bit, with FTR saying that some indications are conditions will continue to improve for shippers this year.

Hammer down everyone!

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