Subscribe to our free, weekly email newsletter!

FTR Shippers’ Condition Index is flat from December to January

By Jeff Berman, Group News Editor
March 14, 2012

The most recent edition of the Shippers Condition Index (SCI) from FTR Associates showed that business conditions for shippers in January were flat compared to December.

The SCI dropped 0.2 points in January, the most recent month for which data is available, to -4.8, said FTR. December’s SCI was -4.8, and November’s SCI was 6.1. May’s -11.4 was the worst SCI reading of this current economic cycle. 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.

FTR said that this most recent SCI reflects a slow acceleration of freight growth that will continue to drive the index gradually lower over the course of 2012. And the firm pointed out in its March Shippers Update that truck utilization will remain relatively strong until new Hours of Service regulations are implemented next year, which could tighten capacity should freight growth continue at its current rate.

FTR Senior Consultant Larry Gross said that while FTR’s economic forecast is on the conservative side, freight growth will exceed GDP growth, which will keep capacity tight and keep freight rates up.

In an interview with LM, Gross said that freight transportation is currently in a period of stability, barring some exterior event like Middle East conflicts or something along those lines. But he cautioned that this stability has a bias towards tightening.

“As time goes on, we feel things will get better for carriers and more adverse for shippers,” Gross said. “We have to keep in mind, of course, that we are just coming out of the slack season, specifically with the increase from February to March being the biggest month-to-month increase of the year. That is not to say March is the busiest month of the year, because it is not. It is just the biggest one-month jump.”

Because this is the biggest monthly gain, Gross said it requires industry stakeholders to “step up their game” to a large degree.

Another thing to be cognizant of, explained Gross, is 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

Slowing global trade and a bloated orderbook of large vessel capacity mean that container shipping is set for another three years of overcapacity and financial pain, according to the latest Container Forecaster report published by global shipping consultancy Drewry.

The NRF is calling for 2015 holiday sales to see a 3.7 percent annual gain to $630.5 billion, which comfortably outpaces the ten-year average of 2.5 percent.

On the heels of announcing it plans to acquire freight transportation and logistics services provider Con-way Inc. for $3 billion, XPO Logistics may be considering selling off Con-way Truckload, the company’s truckload arm.

The International Air Cargo Association (TIACA) has called on world leaders meeting at the United Nations this week to work together to find solutions to the ongoing migrant crisis in Europe

More than 20 U.S. port authority officials and their key staff, representing seaports from all four U.S. coasts, will gather on October 8 to meet with Congressional leadership to discuss the upcoming surface transportation bill and the U.S. Army Corps of Engineers’ navigation budget.

Article Topics

News · Freight · FTR Associates · GDP · All topics


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

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA