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Indicators: Shippers ‘feeling the pinch’ of tight truck market

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

Tight capacity hammering shippers conditions: In the lead up to the year’s busiest freight season, market conditions for shippers continued to deteriorate, according to the monthly Shippers Conditions Index from FTR. The index’s reading in October plunged to one of its lowest points in recent years, with truck rates on both the spot market and contract market jumping due to tightened truck capacity, FTR reports.

The Shippers Conditions Index is usually a mirrored reflection of conditions for carriers, with negative conditions for shippers usually indicating positive conditions for trucking companies. Eric Starks, FTR’s chairman and CEO, said market conditions for carriers and shippers “have been diverging dramatically” since August.

“The hurricanes highlighted the lack of extra capacity available in the system. This has been followed by continued strong freight conditions in Q3 and into Q4. Shippers are really feeling the pinch right now, and there is fear that the ELD mandate will impact capacity in the spring,” he said. “We have essentially hit the 100 percent capacity mark – there is little, if any, excess truck capacity. Add in regulations, continued freight growth, or winter storms and we could be pushing that above 100 percent. That would leave shippers scrambling to get loads delivered. And that means paying premium rates for those deliveries. It may be a tough first half of 2018 for shippers.”

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James Jaillet is the News Editor for CCJ and Overdrive. Reach him at jjaillet@randallreilly.com.