BLOOMINGTON, Ind. – Shippers in the U.S. continue to face a tough capacity and rate environment, with no relief in sight.
That’s according to the latest Shippers Conditions Index by FTR, which came in a -11.1 rating. FTR projects rate growth will accelerate in Q2 before easing slightly in the second half of the year. Full enforcement of the electronic logging device (ELD) mandate and a continuing driver shortage provide “no real optimism” for shippers, FTR reports.
“The relationship between carriers and shippers tends to swing on a pendulum – with freight demand high and capacity tight, carriers are benefiting,” said Jonathan Starks, chief operating officer, FTR. “Numerous companies are announcing that domestic freight costs are at record levels. Since carriers currently hold such a strong position, shippers need to be hyper-focused on their relationships with carriers.”
Avery Vise, vice-president of trucking research, added, “We are beginning to see the implementation, by both shippers and carriers, of the productivity enhancements that we have been expecting to happen. The elevated rate environment is not expected to be a short-lived event and continued progress will be necessary. There seems to be no single solution, and we are seeing many different routes to addressing the tight capacity environment, from changing driver requirements to increased driving school enrollment to increasing detention payments.”
FTR senior research analyst Todd Tranausky said shippers should be looking at rail and intermodal options.
“But so far, the data has not shown that to be true,” he said. “Intermodal volumes are growing but are limited by constraints of equipment and service levels. Carload volumes, however, are still below 2017 levels through the first 11 weeks of the year. This unwillingness to convert traffic only exacerbates the truck capacity situation.”