Subscribe to our free, weekly email newsletter!


FTR Shippers’ Condition Index drops one point from January to February

By Jeff Berman, Group News Editor
April 23, 2012

Data in the most recent edition of the Shippers Condition Index (SCI) from freight transportation forecasting firm FTR Associates showed that the SCI decline one point in February to -5.6.

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. The SCI in January, December, and November was -4.8, -4.8, and 6.1. May 2011’s -11.4 was the worst SCI reading of this current economic cycle.

FTR officials said that the February SCI number reflects a still-strengthening economy, which is reducing the available amount of transportation capacity for shippers. They added that the SCI is likely to remain in this territory through 2012 and become more negative when truck driver Hours-of-Service regulations are scheduled to take effect in mid-2013.

In an interview with LM, FTR Senior Consultant Larry Gross said that a one point decline in the SCI is a steeper drop than in recent months, but it also is not unusual, given the factors impacting the SCI such as seasonality, due to a mild winter which has impacted buying patterns.

“In general, it is a function of the fact that even in what is normally a down month [February], freight has been relatively strong, which pushed the SCI down,” said Gross. “Things are likely to stay where they are for the balance of the year.”

Another factor to consider is the pricing leverage which carriers have had for more than two years, coupled with capacity idled until the economy shows more improvement.
FTR’s Gross said in a recent interview that even though the economy is again showing signs of recovering, shippers are being cautious because there is still a concern over whether the momentum occurring now will be sustained or not.

“Folks are hedging to the conservative side and from a freight perspective, I would say the absence of a big inventory re-build (which happened during the first half of both 2011 and 2012) is actually bullish, because it shows the levels we are now seeing are less vulnerable,” explained Gross.

And ongoing recent strength in the services sector, which was conspicuously absent in the recovery before, is now gaining momentum, too, which Gross said is a good sign as it represents up to 80 percent of economic activity.

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

While the holiday season is known to bring good tidings and cheer to all, it may also come with another thing that is not so pleasant: higher rate freights. That was the thesis of a commentary written by Mark Montague, industry pricing analyst and chief market-watcher for DAT, a Portland, Ore.-based subsidiary of TransCore.

Earlier this week, FedEx said it is expanding its International First service for early deliveries with the addition of 31 new origin countries, which will bring the total number of origin markets for the service to 97.

Monday, December 22 is pegged as UPS's peak delivery day, as the company expects to deliver more than 34 million packages that day, adding that it expects to see six days in December top last year’s peak shipment day delivery record of 31 million packages.

The time has come again for less-than-truckload (LTL) general rate increases (GRI), with various carriers recently announced their respective rate hikes in recent days.

Key market metrics in the form of capacity and rates appear to be continuing to work against shippers, according to the most recent edition of the Shippers Condition Index (SCI) from freight transportation forecasting firm FTR.

Article Topics

News · FTR Associates · All topics

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