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
Improving Packaging: The Cost of Shipping Air is Going Up
Retailers and manufacturers that insist on using inefficient and sloppy packaging methods—oversized boxes, inefficient packaging, poorly constructed palletized contents—are paying for their mistakes in sharply higher freight rates. Pitt Ohio White Paper, Logistics White Paper, Dimensional Packaging
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
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
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo