FTR Shippers’ Condition Index continues on an upward path

FTR Associates reported that while business conditions remain largely uncertain, things are improving for shippers.

By ·

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, 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!

Latest Whitepaper
How Lean is your Lean Quality Program?
Avoid quality program bureaucracy that can sap logistics productivity and increase costs
Download Today!
From the September 2016 Issue
Indecision revolving around three complex supply chain elements—transportation, technology and organizational structure—finds many companies waiting to commit to a strategic path. However, waiting too long will only result in a competitive disadvantage that will be difficult to overcome in today’s fast-paced, global economy.
Time for Asia’s ports to rebuild
Is the freight recession upon us…again?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Supply Chain Best Practices: Visibility to In-Transit Inventory
During this webcast you'll learn on how various organizations have gained instant access to in-transit parcels and given access to this information to stakeholders.
Register Today!
EDITORS' PICKS
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...

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....