Research company FTR said its latest Shippers Conditions Index fell to a near-neutral reading of 0.4 in March after improving for each of the four previous months.
FTR said in a May 25 release the risk of diesel prices rising has put pressure on the fuel cost component of the index, reflected in the current month’s decline. However, the company expects the SCI to remain in positive territory at least until late 2016 as the weakening of freight conditions continues to favor the shipper.
It said the index is a compilation of factors affecting shippers' transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below -10 signal conditions for shippers are approaching critical levels, based on available capacity and expected costs.
“We are nearing a point in time where the chance of another round of capacity shortages would bring even more pressure to build inventories,” FTR Chief Operating Officer Jonathan Starks said in a statement.
“At the same time, macroeconomic forces could weaken sales enough to kick off a traditional round of inventory reductions. Maintaining adequate stock levels under these countervailing pressures will test the best logistics functions,” Starks said.
