BLOOMINGTON, Ind. — Shippers in the US are continuing to deal with extremely tight capacity, according to the latest FTR Shippers Conditions Index.
The March reading was unchanged from February, at about -8.7, indicating “extremely tight capacity available to haul goods,” FTR reported.
The freight forecaster said it expects capacity to moderate slightly in the coming months, unless freight demand increases. Any additional improvements in freight tonnage could create a “critical stage,” forcing shippers to incur added purchased transportation costs, FTR reported.
“Shippers learned that it doesn’t take much for a market that is operating with slim excess capacity to jump into the driver’s seat for rate increases,” said Jonathan Starks, director of transportation analysis with FTR. “The strong spot market rate increases seen during January, February, and March highlighted how quickly the environment can change on them. Just one year ago, several industry sources were showing that general rate increases were actually below year-ago levels; shippers were getting rate reductions!
“A fairly static economy allowed that to take place, but the introduction of new hours-of-service (HOS) rules for drivers back in July 2013 changed that. Add in the potential for further economic acceleration in 2014 and we find it very unlikely that shippers will be able to get the rate reductions that they achieved last year. FTR expects to see general rate increases of between 4-5% for the year for truckload with national rate figures hitting 6% or higher versus last year during the middle of 2014.”
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