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

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, recently said it is opening up the “vault,” so to speak. The vault in this case is making its copious amount of trade data accessible through an Application Programming Interface (API), which enables customers to extract Panjiva’s trade data into their own database.

Freight transportation and logistics services provider Averitt Express recently announced it has rolled out improved transit times for less-than-truckload (LTL) service from the Midwest to Toronto and other cities.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Anne Ferro, a ferocious advocate for greater truck safety and a constant thorn to truck drivers and some unsafe trucking fleets, says she is leaving as administrator of the Federal Motor Carrier Safety Administration. No successor has been immediately named.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

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