FTR Shippers’ Condition Index points to future declines

As many factors related to the economy remain highly uncertain, data released by freight transportation forecasting firm FTR Associates indicates that business conditions for shippers are better than they were earlier in the year but are again showing signs of slipping.

By ·

As many factors related to the economy remain highly uncertain, data released by freight transportation forecasting firm FTR Associates indicates that business conditions for shippers are better than they were earlier in the year but are again showing signs of slipping.

In FTR’s most recent edition of its Shippers’ Condition Index (SCI), the firm noted that after a “brief term of improving conditions for shippers, [the SCI] has begun to fall as expected. The deterioration reflects the current trucking situation in which demand has completely utilized the available fleet capacity leaving little room for even modest seasonal increases in activity.

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.

FTR said the current SCI reading for July, the most recent month for which data is available, is -3.8, which is down from -3.1 in June. This is better than May’s -11.4, which marked the worst SCI reading of this current economic cycle.

“There are a number of issues in play at the moment,” said FTR Senior Consultant Larry Gross in an interview. “One is a ‘pipeline’ issue and that is the ability of carriers to process drivers and qualify and train them. We think there are issues here…with carriers not dramatically beefing up their recruiting capabilities, which is a fixed cost and expensive and basic problems of supply.”

Another issue impacting this situation is the regulations taking place which Gross said are restricting productivity of the driver fleet at a time when more drivers are needed.

And with the number of sideways-like seasonally-adjusted economic indicators used to gauge the economy, Gross said that while capacity is tight volume are increasing seasonally. Even if a seasonally-adjusted index is showing a flat performance, it still means more drivers are needed in a current month than the previous month, said Gross, because the seasonal peak is approaching. He added that while these indices are seasonally-adjusted the driver supply is not.

How this year’s Peak Season plays out is yet to be determined, as this year there is not the high level of inventory rebuilding by shippers, as was the case a year ago, which led to increased and earlier Peak Season activity.


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
Supply Chain Visibility: Illuminating the Path to Responsive, Agile Operations
Supply chain visibility is not an end, but a tool. It is the means to achieving true supply chain effectiveness, agility and ultimately, corporate profitability.
Download Today!
From the December 2017 Logistics Management Magazine Issue
Trade and transport analysts see rates rising across all modes in accordance with continued expansion of domestic and international markets. Economists, meanwhile, say shippers can expect revenue growth in transport verticals to remain in the 3%-plus range.
2018 Customs & Regulations Update:10 observations on the “digital trade transformation”
Moore on Pricing: Freight settlement and your TMS
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2018 Rate Forecast
Join our panel of top oil and transportation analysts for an exclusive look at where rates are headed and the issues driving those rate increases over the coming year.
Register Today!
EDITORS' PICKS
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...
Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...

2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...