Subscribe to our free, weekly email newsletter!


FTR Shippers’ Condition Index continues on an upward path

By Jeff Berman, Group News Editor
July 22, 2011

As was the case a month ago, FTR Associates reported that while business conditions remain largely uncertain, things are improving for shippers.

That was the consensus of the firm’s most recent edition of its Shippers’ Condition Index (SCI). The SCI is based on “all market influences that affect shippers,” with a reading of zero reflecting a solid environment and anything below zero reflecting an unfavorable environment.

The most recent SCI reading is -3.6, which is up from -5.4 in June and -11.4 in May, which marked the worst SCI reading of this current economic cycle, according to FTR. FTR explained that even though overall conditions remain “unfavorable from the standpoint of the shipper,” things are not as bad as they were earlier in the year.

But it cautioned that the road to improvement will not be smooth, because once the rate of economic growth kicks in throughout the rest of the year, the SCI is likely to decline, due to strained freight capacity caused by higher demand.

“We are definitely in a soft spot in the economy,” said FTR Senior Consultant Larry Gross in a recent interview. “Recoveries never happen in a straight line. There are always going to be ups and downs and that is what is happening now. And there are also outside events like the Japanese Tsunami and earthquake, Libya and oil prices, and government spending that also has an impact, too.”

From a shipper’s standpoint, Gross stressed it would be unwise to plan against tight capacity and increased rates in coming months, as the SCI rebound is likely to be a very short-term affair.

Gross added that once the economy resumes a positive growth path it is likely that the SCI will again result in slower growth, due to trucking regulations taking hold and rates increasing through next year as fuel, equipment, and labor costs rise faster than the general rate of inflation.

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 'Internet of Things' or IoT is a term that has rapidly taken center stage in business and consumer technology circles, with tremendous amounts of hype in both. Don't be distracted if some of the hypothetical consumer examples of the IoT seem far-fetched; the trend has serious implications for businesses. This complimentary whitepaper takes a look at some of the opportunities afforded by the Internet of Business Things.

Of special interest to readers of Logistics Management will be “Americas Update,” which will look into the future of the market in the Americas and assess how firms will be able to favorably position themselves to compete and win market share.

After 20 years, two congressional mandates and countless lawsuits and lobbying efforts, safety advocates and the Teamsters union still say there are too many inexperienced rookie truck drivers hitting the road without sufficient behind-the-wheel training.

Congested U.S. port terminals, harbor and over-the-road truck and driver shortages, slower trains and longer rail terminal dwell times due to increased domestic rates have not only disrupted service but also driven intermodal rates and cargo handling costs up sharply.

Southern California shippers are getting a break on container dwell expenses for the next ten days as the Port of Long Beach announced that it had added an extra three days to the time that overseas import containers can remain on the docks without charge.

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA