BLOOMINGTON, Ind. – Industry forecaster FTR is warning shippers to develop contingency plans, as trucking capacity is expected to tighten through 2017.
Its Shippers Condition Index (SCI) remained in slightly positive territory in November, with a reading of 1.4. But FTR is predicting deteriorating conditions for shippers through the year, as carriers adopt electronic logging devices (ELDs). Coupled with oil price inflation and the chance of general inflation, FTR expects trucking costs to rise.
A reading of less than zero indicates conditions favor truckers. A reading of below -10 indicates conditions are near critical for shippers.
“Although many shippers are saying, ‘We will believe it when we see it,’ our thesis that truck capacity will tighten significantly over the course of 2017 remains intact,” said Larry Gross, partner and senior consultant at FTR. “Some may believe that the course of this mainly regulatory-driven event will be altered by the Trump administration, but our expectation is that the key change, namely the mandate for ELDs, will take effect in December as planned. This will cause substantial deterioration in the SI over the course of this year. While the pace and even the magnitude of the deterioration is still somewhat uncertain, shippers would be wise to lay in contingency plans for dealing with this significant event.”