FTR Associates’ data points to flat business conditions for shippers

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).

By ·

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, 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!

Article Topics

FTR Associates · All Topics
Latest Whitepaper
Outsourced Transportation Management
All the benefits of owning a fleet without the headache of managing it.
Download Today!
From the August 2017 Logistics Management Magazine Issue
Which carriers, third-party logistics providers, and North American ports have crossed the service excellence finish line ahead of their competitors? Our readers have cast their votes, and now it’s time to introduce this year’s winners of the coveted Quest for Quality Awards.
BMW Takes the Inland Road to Efficiency
Global Logistics: No Shortcuts to Security
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...