Subscribe to our free, weekly email newsletter!

FTR Associates’ data points to flat business conditions for shippers

By Jeff Berman, Group News Editor
June 14, 2012

Fairly flat business conditions for shippers appear to be the new normal in a way. That appears to be the general consensus of freight transportation consultancy FTR Associates monthly Shippers Conditions Index (SCI).

The SCI for April, the most recent month for which data is available, was -5.4, down slightly from March’s -5.3. A reading above 0 suggests a favorable shipping environment, and FTR describes the SCI as an indicator that sums up all market influences that affect shippers, with a reading above zero being favorable and a reading below zero being unfavorable. May 2011’s -11.4 was the worst SCI reading of this current economic cycle.

FTR officials said that the SCI is expected to remain in a tight range throughout the summer, potentially deteriorating marginally in the latter part of the year, with the real negative impact to shippers will beginning in 2013 as new Hours of Service rules are expected to further reduce already tight trucking capacity.

“The current lackluster performance of the economy has had a silver lining for shippers as slow growth in truck freight demand has not caused capacity to tighten to a great extent, keeping a lid on rates,” said FTR Senior Consultant Larry Gross in a statement. “The moment of truth has been delayed but not avoided.  We still expect shipping conditions to deteriorate as we move into 2013 unless external events such as the European debt crisis send the economy back into a tailspin – an event that is possible but not considered likely as of this point.”

In a recent interview with LM, Gross explained that the forces that are in motion now are slow but very powerful, adding that unless the economy turns solid in a big way, things are going to get tougher for shippers, especially as new regulations take hold.

“From a shippers’ standpoint, rates will go up, and capacity will get harder to find,” he said.

Various carriers have told LM that rate hikes, especially on the trucking side, will be coming to help off-set their increased expenses being brought on my steep equipment costs, labor, and regulations, among other factors.

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

Kurt Nagle, president and CEO of the American Association of Port Authorities recently voiced his endorsement of this trade legislation

While many auto executives expect more industry recalls in 2015 and 2016, just 8 percent use advanced predictive analytics to help prevent, prepare for, and manage recalls, according to a recent online poll from Deloitte.

Purolator white paper highlights common Canadian shipping mistakes. From failing to appreciate the complexity of the customs clearance process to not realizing that Canada recognizes both French and English as its official languages, U.S. businesses frequently misjudge the complexity of shipping to the Canadian market. This often results in mistakes - mistakes that can come with hefty penalties and border clearance delays, and that can result in lingering negative perceptions among Canadian consumers.

At a certain point, it seems like the ongoing truck driver shortage cannot get any worse, right? Well, think again, because of myriad reasons we could well be in the very early innings of a game that is, and continues, to be hard to watch. That was made clear in a report issued by the American Trucking Associations (ATA), entitled “Truck Driver Analysis 2015.”

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.

Article Topics

News · FTR Associates · All topics


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

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA