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 Institute for Supply Management’s (ISM) August edition of the Manufacturing Report on Business saw its PMI, the ISM’s index to measure growth, fall 1.6 percent to 51.1, following a 0.8 percent decline to 52.7 in July. Even with the relatively slow growth over the last two months, the PI has been at 50 or higher for 31 consecutive months.

Hackett observed in the new report that China’s economy has lost steam, with actual growth falling short of targeted rates, while the United States most recent second quarter GDP reading at 3.7 percent outpaced expected targets, even though it was negatively impacted by gains in manufacturing and retail inventories.

The proposed merger of Cosco and CSCL could spark further container consolidation

The average price dropped 4.7 cents to $2.514 per gallon, which now stands at the lowest weekly average price for diesel since July 2009, when it was at $2.542 the week of July 27, 2009, according to EIA data.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement partners Canada and Mexico in June dropped 3.8 percent annually to $99.0 billion. This followed a 10.8 percent decline in May to $92.7 billion.

Article Topics

News · Trucking · FTR Associates · Trucking HOS · HOS · Capacity · All topics

Comments

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