Decline in FTR index reflects challenging times for shippers
Despite data points that indicate the economy is firming, it may not always feel that way for shippers, especially these days. That was especially true with the recent release of the Shippers’ Condition Index (SCI) from FTR Associates.
in the News2018 MHI Innovation Award finalists announced The Overlooked Competitive Advantage: Connected Teams Reusable Packaging Association announces 2018 board and committee chairs Face security threats head-on. Protect data beyond perimeter. Maersk’s “Transformation” Under Scrutiny More News
Despite data points that indicate the economy is firming, it may not always feel that way for shippers, especially these days.
That was especially true with the recent release of the Shippers’ Condition Index (SCI) from FTR Associates.
FTR reported that the current SCI reading of -11.4 reflects tightening capacity and accelerating transport costs in the form of increasing rates and diesel prices. The firm bases the SCI on “all market influences that affect shippers,” with a reading of zero reflecting a solid environment and anything below zero an unfavorable environment.
Among the things representing an unfavorable environment for shippers are the impact of tighter capacity, with base rates for major modes—and their respective fuel surcharges—on the rise, and with fuel surcharge relief possible later in the year, FTR maintains base rates are expected to continue to increase.
“This is the worst SCI reading of this cycle,” said Larry Gross, FTR senior consultant. “We are anticipating that going forward over a period of time that it is going to stabilize…at a negative level. It is some comfort to the shipper, but we are not anticipating any improvement. So much of this depends on what is going with the government and the Federal Motor Carrier Safety Administration, regarding Hours-of-Service revisions and can create a source of uncertainty.”
FTR also recently reported that its Truckers Conditions Index increased to 13.30 in March, up from February’s 9.92, due in large part to carriers getting higher rates as capacity remains tight. An index reading above zero represents an adequate trucking environment, said FTR, with a reading above 10 pointing to a good range for carriers in terms of volume, prices, and margin.
This index, said FTR, as seen consistent growth since October 2010.
FTR President Eric Starks said in a statement that during the first months of 2011, the fundamentals of the balance between the supply and demand for truck transport was obscured by the normal seasonal weakness in demand. He added that demand is expected to hold up, due to continuing strength in the manufacturing sector at a time when GDP growth is waning.
For related articles, please click here.
About the AuthorJeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
The Future of Retail Distribution Navigating the Reverse Supply Chain for Connected Devices View More From this Issue