Indicators: Maxed-out capacity keeps shippers conditions ‘decidedly negative’

CCJ‘s Indicators rounds up the latest reports on trucking business indicators on rates, freight, equipment, the economy and more.

The record-tight trucking market, which has the industry operating at near maximum capacity and rates setting records, has held market conditions for shippers in “decidedly negative territory,” according to FTR’s monthly Shippers Conditions Index.

FTR expects freight demand to hold strong, though conditions for shippers could ease some later in the year as carriers add capacity and shippers adjust their operations to help boost carriers’ productivity.

“The question for many shippers is how long will the tough times last? When we look at freight demand, which has been strengthening for nearly a year now, our forecast shows robust demand for most of 2018,” says Jonathan Starks, Chief Operating Officer for FTR. “For shippers who haven’t locked in capacity, this year’s spring shipping season will be a tough one.”

Avery Vise, VP of Trucking at FTR, commented, “We are seeing record truck and trailer orders, which indicate buying above replacement demand, and much of that will hit the market in the second half. We anticipate that shippers and carriers will implement a host of productivity enhancements — measures like drop-and-hook, better scheduling for pickups and deliveries, faster dock turnarounds, better coordination among shippers through intermediaries, and so on. Higher rates motivate shippers to be much more flexible on steps that increase carrier productivity.”