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

Now that the deal, which had to clear several regulatory hurdles in multiple countries, is official, FedEx executives were able to speak a little bit more freely, albeit being somewhat guarded in regards to certain integration specifics at the same time.

As the July 1st date for complete compliance looms, shippers are seeking help to cope with the mandatory changes instituted by the International Maritime Organization (IMO) to the Safety of Life at Sea Convention (SOLAS).

As of July 1, only containers with a verified gross mass will be cleared to be loaded onto a ship under the International Maritime Organization’s Safety of Life at Sea (SOLAS) Verified Gross Mass (VGM) amendment. Shippers hoping that the implementation of the ruling will be delayed or deferred are whistling in the dark, say industry analysts.

Amid the many worrisome economic indicators kicking around of late, something along the lines of good news came about this week in the form of United States new home sales data, issued by the United States Department of Commerce this week.

In March, the SCI came in at 0.4, which FTR described as “a near neutral reading” on the heels of four months of more favorable market trends for shippers.

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