It is no secret that shipping costs have been on an upward trend for quite some time. According to Freight Transportation Research Associates (FTR) costs for 2018 are expected to be 12 percent higher than 2017. FTR is also forecasting a possible increase of at least 6 percent for 2019.
Predictions Based on Shippers Conditions Index
The FTR bases its predictions based on the analysis of data from its Shippers Condition Index (SCI). This index keeps track of changes with four major conditions that have an impact on the full-load freight market in the United States:
- Freight demand
- Freight rates
- Fleet capacity
- Fuel price
The current SCI remains in the negative range, just shy of double digits, which serves as a warning to the industry. An optimal SCI is generally within the positive single digits.
As with all industries, demand can help drive rates up, especially when a shortage exists. And with the freight industry, there is a shortage of carriers that is putting a strain on the fleet capacity of carriers. Not only are carriers struggling with keeping up with the demand with a lean workforce, they are also dealing with higher fuel prices. Having to deal with crumbling infrastructure and traffic delays throughout the country is not helping matters either for carriers.
But it is not all doom and gloom. The SCI is indicating that there could be some stability on the horizon for rates, capacity, and drivers. This is good news as rates have been slightly slipping lower over the past several months. Shippers can pretty much expect their service to remain status quo through the remainder of the year.
What this Means for Carriers
The recent Shippers Update from FTR goes into detail about the factors that are influencing the SCI. One of the strongest factors affecting the industry is the difficulty that carriers are having filling the positions they need to move freight at an optimum capacity. Meanwhile, manufacturers are struggling to keep up with the demand to get more rigs out on the road.
The need for truckers continues to grow. This is great news for current carriers. There is no better time than now to take charge and control your future in the freight industry. You can do this by joining Cargobot where you can connect directly with shippers and set your own load rates.
