Subscribe to our free, weekly email newsletter!


FTR Shippers’ Condition Index at lowest level since 2004

By Jeff Berman, Group News Editor
April 14, 2011

As various factors such as increasing diesel prices, tight capacity, and rate pressure continue to take hold in the freight transportation market, they appear to be taking a toll on shippers, according to the April edition of the Shippers’ Condition Index (SCI) released this week by freight transportation consultancy FTR Associates.

The SCI’s current reading of -7.7 indicates what the firm described as “continued deterioration,” with the outlook for capacity shortages getting worse. FTR 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.

FTR officials said that the SCI is approaching levels that have not been seen since 2004, which was a difficult time for shippers. They added that shippers are currently feeling the impact of tighter capacity, with base rates for major modes—and their respective fuel surcharges—on the rise, adding that while they may see relief on fuel surcharges later in the year base rates are likely to continue heading up.

In an interview with LM, FTR Senior Consultant Larry Gross said that what is currently happening when it comes to rates is essentially a carrier—or supplier—market.

“There is no question about that, but it is not being done in a vindictive way,” said Gross. “This is just the way supply and demand works, and right now we are going to go into a period of tight supply, which means that pressure is going to be on the shippers.”

And with driver ability being the true key to capacity and the situation continues to tighten, Gross explained that carriers are going to be looking “very differently” at shippers that provide them the opportunity to make good use of their drivers compared to shipper customers that don’t make good use of drivers.

An example of the latter would be a shipper that experiences routine delays or has shipments tied up at loading dock, which from a carrier’s standpoint is undesirable and waste drivers’ time.

“That type of shipper is going to find it a whole lot more difficult to get capacity, and it will get more expense for them to get freight moved, with carriers becoming more discriminating,” said Gross. “Shippers are not helpless here; they can do things that are going to help them during this tight capacity situation.”

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

The Department of Commerce reported that January retail sales were up 0.2 percent compared to December and up 3.7 percent annually at $449.9 billion, and the NRF reported that January retail sales, which exclude automobiles, gas stations, and restaurants, rose 0.6 percent over December and 1.4 percent compared to January 2015.

On the freight shipments side, Cass reported that January shipments––at 1.025––trailed December by 1.3 percent and January 2016 by 0.2 percent. These declines were less than the 4.9 percent drop from November to December, though, and January shipments still topped the 1.0 mark for the 65th straight month in December.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that its Freight Transportation Services Index (TSI) saw a 0.4 percent decline from November to December, its second straight decline on the heels of a 1.0 percent decrease from October to November.

Carloads saw a 11.7 percent annual decline at 241,680, and intermodal containers and trailers rose 10.5 percent to 262,830

An amendment to the International Maritime Organization’s Safety of Life at Sea convention will go into effect requiring all shippers (importers and exporters) to certify and submit the Verified Gross Mass – the combined weight of the cargo and the container – to the steamship line and terminal operator in advance of loading the container aboard a vessel.

Comments

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


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA