Shipper’s get mixed forecast on intermodal service

Shippers attending the Intermodal Association of North America’s (IANA) annual Intermodal Expo in Long Beach this week were given some good news/bad news regarding truck and rail capacity for the remaining year.

FTR’s Shippers Conditions Index (SCI) for July fell 1.3 points from the previous month to a reading of -7.8, reflecting tightening truck capacity and a strong upward move in contract pricing ahead of the fall shipping surge, noted analysts with freight transportation forecasting.

Larry Gross, an intermodal analyst for FTR, stated that shippers should not expect rail velocity to improve this year, while service levels remain flat at best.

This observation was made a few days earlier by Jonathan Starks, FTR’s Director of Transportation Analysis:

“FTR just concluded its annual transportation conference, and our numerous interactions with shippers, truck fleets, and railroads only enhanced our conviction that the freight transportation markets remain strained,” he said.

The silver lining, however, is that the industry will be able to handle most of these challenges with only limited capacity shortages.

“The downside is that truck rates are continuing to move higher and are unlikely to stop that momentum this year,” said Starks. “Also, even though outright shortages will be limited, it will take even more work, and possibly delays, to get your non-optimized loads moved.”

The Shippers Conditions 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 that conditions for shippers are approaching critical levels, based on available capacity and expected rates.