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
Just Released: Understanding Hazmat Transportation Management
The rules and regulations governing the transportation of hazardous materials (hazmat) are complex.
Download Today!
From the July 2017 Logistics Management Issue
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish demand and political doubt. The result: “cognitive dissonance” that finds a $1.4 trillion market scratching its head.
2017 Truckload Brokerage Roundtable: Technology continues to connect the dots
Cloud Transportation Management Systems (TMS): Weis Markets streamlines “both sides” of the DC door
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
28th Annual State of Logistics: Into the great unknown
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...