FTR reports Shipping Conditions Index may head down in coming months
in the NewsBehind KION Group’s acquisition of Dematic UniCarriers Americas executives partner with Roosevelt University Brexit impact yet to be measured by U.S. logistics managers Rail carload and intermodal volumes fall for the week ending June 18, reports AAR BTS reports U.S.-NAFTA trade falls 3.2 percent in April More News
Business conditions for shippers appear to be on the precipice of a downward slope, according to the monthly Shippers Conditions Index from freight transportation consultancy FTR Associates.
The SCI for July, the most recent month for which data is available, was -4.5, which was steeper than June’s -1.8. 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 said that this current period commences what it labels as an “inflection point” in which costs and rates head up of the U.S. economy is able to sustain a mostly healthy freight market as new regulations go into effect.
The firm added that the forecasted tightening of capacity and associated rise in shipping costs will continue to have a negative impact on the SCI unless the economy’s recovery is sharper than expected.
In an interview with LM, FTR Senior Consultant Larry Gross noted that in previous months, conditions had been better for carriers than shippers although now the pendulum seems to be shifting away in making things more complicated for shippers barring further delays in Federal Motor Carrier Safety Administration regulations like CSA, HOS, and EOBR or a further decline in economic conditions.
“Carriers are finding that the past few months have been a little more difficult while there seems to be an adequate supply of truck capacity out there to meet demand at the moment,” he said. “That is why the SCI is not going up at the moment—or getting any worse.”
What’s more, the demand environment at the moment is “sensitive” because the economy is in a soft patch, Gross observes.
About the AuthorJeff Berman 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!
WMS Update: What do we need to run a WMS? Supply Chain Software Convergence: Synchronization Realized View More From this Issue