A plunging index number spells out the tough times for shippers

The FTR Shippers Condition Index slid to -11.1 in January, continuing a declining trend that began in the middle of 2017.

The number “reflects the challenges (shippers) are facing entering into the new year,” FTR said in a release accompanying the release of the numbers. “Rate growth year-over-year is expected to accelerate in Q2 before easing slightly in the second half of 2018.”

FTR defines the index as being constructed using four components: freight demand, freight rates, fleet capacity and fuel price. It said a positive score represents “good optimistic conditions.” A negative score is the opposite, though obviously, what’s good for shippers might not be good for carriers, and vice-versa.

Avery Vise, FTR’s vice president of trucking research, said what was unique about the current tight trucking market is how long it has lasted. “The last time we saw this was for about 3-4 months in 2004, and we’re already passed that length,” he told Freightwaves. FTR expects lower freight rates by the end of the year, but Vise said it was only going to “settle down gradually.”

In the prepared statement that accompanied the release of the numbers, Vise said the industry is starting to benefit from increasing use of a wide range of productivity enhancements. More use of “drop and hook,” where a driver quickly exchanges a full trailer at a delivery point for a loaded one, having reefer vans full of produce or other products and ready to go, all are being used to a greater degree than in the past, Vise said. It all comes down to more greatly valuing driver’s time, because that is the commodity in supply chain that is becoming the most valuable.

One thing that isn’t happening to any great degree is a shift over to rail. Todd Tranausky, a senior research analyst at FTR, said in the release that there should be more signs pointing to a move toward trains. “But so far, the data has not shown that to be true,” Tranausky said. “Intermodal volumes are growing but are limited by constraints of equipment and service levels,” a statement that would get little pushback from some users of the rails.

Jonathan Starks, FTR’s COO, appeared to be echoing the main theme of a recent Arrive Logistics webinar when he noted that because “carriers currently hold such a strong position, shippers need to be hyper-focused on their relationship with carriers.”


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One Comment

  1. 40 dollars he. Not enough make 120 he driving. Detention should be at least half of that.then maybe shippers receivers would think twice about holding up the truck but I don’t think so

  2. I guess this happens when you don’t pay driver enough to be over the road anymore. I expect to see these numbers continue to go downward as more and more older truckers leave the road. I don’t see many young people taking up this trade because of low wages.