Subscribe to our free, weekly email newsletter!


FTR Shippers’ Condition Index show modest uptick

By Jeff Berman, Group News Editor
February 15, 2012

Business conditions for shippers in December showed improvement from November but still represent a “somewhat adverse” environment, according to the most recent edition of the Shippers Condition Index (SCI) from freight transportation forecasting firm FTR Associates.

The SCI edged up roughly 1-to-1.5 points in December, the most recent month for which data is available, to -4.6, said FTR. November’s SCI was 6.1, and 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.

FTR officials said that this sequential improvement from November to December highlights an “easing in demand for transport capacity.”

And the firm added that tight equilibrium between demand and transport capacity will keep the SCI stable in modestly negative territory until 2013 at which point it could worsen as a result of a regulatory drag on capacity from the Federal Motor Carriers Safety Administration’s final Hours-of-Service rule, which is expected to take effect by mid-2013.

“FTR’s base case anticipates that conditions will continue to be difficult for the nation’s shippers, even though economic growth is still anticipated to be lackluster,” said FTR Senior Consultant Larry Gross in a statement. “If the recent spate of good economic news translates into more robust economic growth, capacity would tighten significantly and greater upward pressure on freight rates will result.”

In a recent interview with LM, Gross said that the current SCI readings represent a “more of the same” type of theme in that tight capacity and firm rates are expected to remain intact. Another hindrance to adding capacity, said Gross, is an ongoing challenge for carriers to find available drivers.

“With HOS, it is much less likely in this extended timeframe and the more moderate posture of the final rule that there will be some sort of court delay in this timetable [should safety groups or trucking groups challenge the FMCSA’s HOS ruling in court],” he said. “The question is whether the Feds have successfully threaded the needle and put out a rule that sufficiently displeases each party to the extent that it can get through the court. But a court may say ‘these guys listened and made an attempt to put good science behind it’ and that the rule is imperfect but not imperfect enough to the point where it should intervene. It is very likely that could be the end result and may be the end of this [HOS] saga.”

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

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement (NAFTA) partners Canada and Mexico increased 8.2 percent from September 2013 to September 2014 at $102.2 billion.

NS said that the D&H lines it plans to acquire connect with the NS network at Sunbury, Pa. and Binghamton, N.Y. and give NS single-line routes from Chicago and the southeast U.S. to Albany, N.Y., which is in close proximity to NS’ Mechanicville, N.Y.-based intermodal terminal.

This follows a 1.6 cent decrease last week, which was preceded by a 5.4 gain the week before and stands as the first increase going back to the week of June 23, when the weekly average headed up 3.7 cents to $3.919 per gallon.

BNSF said that its 2015 capital expenditures will be allocated towards various areas of its business, including maintenance and expansion of the railroad to meet the expected demand for freight rail service, with 2015 representing the third straight year BNSF has invested a record annual capital expenditures investment.

While the ongoing labor negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) ostensibly going from bad to worse, following the ILWU’s announcement late last week that it was halting negotiations from November 20 through November 30, a Congressional group last week penned a letter to PMA and ILWU leadership expressing concern over the state of the negotiations.

Article Topics

News · Trucking · Trucking HOS · FTR Associates · HOS · Capacity · 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