Subscribe to our free, weekly email newsletter!


Decline in FTR index reflects challenging times for shippers

By Jeff Berman, Group News Editor
May 16, 2011

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 Author

Jeff Berman headshot
Jeff 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. .(JavaScript must be enabled to view this email address).


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!

Recent Entries

The value of exports from America’s Foreign-Trade Zones increased by 13.7 percent in 2013, to a record-high 79.5 billion in merchandise exported, according to figures released by the U.S. Foreign-Trade Zones Board in its Annual Report to Congress.

While summer may be nearing its end, the climate in the manufacturing sector remains very warm, according to the most recent edition of the Manufacturing Report on Business issued today by the Institute for Supply Management.

When publicly-traded Class I freight railroad and intermodal service providers issued second quarter earnings results earlier this summer, the topic of less than ideal service on the rails was a common theme within the earnings releases and question and answer sessions with top management at those companies.

Supply chain security provider Freightwatch International has released its semi-annual report on cargo theft in the Asia Pacific region for the first half of 2014, which contains some heartening news for U.S. shippers reliant on trucking, warehousing and retail.

FedEx Ground, a subsidiary of FedEx Corporation, reports today that a decision by a three-judge panel of the United States Court of Appeals for the Ninth Circuit reversed previous rulings by the District Court for the Northern District of Indiana in three class action cases involving mostly former independent contractors for FedEx Ground

Article Topics

News · Trucking · Transportation · FTR Associates · Rates · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA