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
Reduce Order Processing Costs by 80%
Sales order automation software will seamlessly transform inbound emailed and printed purchase orders into electronic sales orders that can be automatically processed into your ERP system with 100% accuracy.
Download Today!
From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
WMS Update: What do we need to run a WMS?
Supply Chain Software Convergence: Synchronization Realized
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Optimizing Global Transportation: How NVOCCs Can Use Technology to Operate More Profitably
Global transportation isn't getting any easier to manage, especially for non-vessel operating common carriers (NVOCCs). Faced with uncertainties like surcharges—but needing to remain competitive when bidding against other providers—NVOCCs need the right mix of historical data, data intelligence, and technology support to make quick and effective decisions. During this webcast you'll learn how Bolloré Transport & Logistics was able to streamline its global logistics and automate contract management.
Register Today!
EDITORS' PICKS
Top 50 U.S. and Global 3PLs 2016: Technology Now the Key Differentiator
Following last year’s merger and acquisition frenzy, the speed of technology implementation by the...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo