Subscribe to our free, weekly email newsletter!


FTR’s Shippers Condition Index continues to decrease

By Jeff Berman, Group News Editor
March 25, 2013

Typically, when things are going well for carriers, it often means they are not going as well for shippers. Based on the most recent edition of the Shipper Conditions Index (SCI) from freight transportation consultancy FTR Associates that appears to be the current trend.

January’s SCI, which represents data for the most recent month available, was -7.1, which is down 2 percentage points from December. 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, with a reading above zero being favorable and a reading below zero being unfavorable. May 2011’s -11.4 was the worst SCI reading of this current economic cycle.

FTR said that the SCI represents “deteriorating conditions” for shippers early in 2013, with the SCI forecast expected to continue moving down as the year moves on, approaching negative double-digits by the end of 2013.

This, said FTR, will result in increased freight rates as volumes continue their slow crawl, with capacity expected to be hindered by regulations, including motor carriers hours-of-service (HOS), which is expected to kick off in July and limit available time trucks can spend on the road with subsequent increases in rates and decreases in available capacity.

FTR Senior Consultant Larry Gross told LM that back in 2004 there was a combination of a change in HOS and a growing economy, which resulted in about two years of freight increases.

“Now, this year, we have a raft of regulatory changes, plus a growing economy, with the new HOS rules as currently constructed likely to stand,” he said. “We are setting ourselves up for a 2004 replay, but the pressure on the driver supply and capacity is going to be considerably longer than the one-shot event that occurred in 2004. So we see the prospect for a negative rate environment extending much further.”

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

With congestion issues and seaport gridlocks plaguing the transportation industry, air freight volumes are back on the rise. According to JLL’s annual Airport Outlook Report, global air cargo saw a 4.5 percent annual increase in 2014 and the forecast calls for 5 percent growth in 2015.

With a 3.1 cent increase, this week’s average price is $2.811, following last week’s 0.26 cent boost. The gains over the last two weeks come on the heels of a cumulative 16.3 cent decrease over the previous five weeks.

Transportation and logistics bellwether UPS began 2015 in solid fashion with first quarter revenue up 1.4 percent at $14.0 billion and operating profit up 11 percent at $1.7 billion. Earnings per share were up 14 percent at $1.12, which exceeded Wall Street expectations of $1.09, while revenue was shy of the Street’s $14.27 billion estimate.

Last week, the United States Department of Transportation took further steps to address various issues identified in recent train accidents involving crude oil and ethanol shipped by rail. The announcement was made by DOT with other DOT agencies, including the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Logistics Management Group News Editor Jeff Berman had an opportunity to interview Derek Leathers, President and Chief Operating Officer of Werner Enterprises, at this month's NASSTRAC Shippers Conference and Transportation Expo in Orlando. They discussed various aspects of the truckload market, including prices, fuel, and regulations.

Article Topics

News · FTR Associates · HOS · trucking · SCI · 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