Subscribe to our free, weekly email newsletter!


FTR’s Shippers Condition Index shows some improvement

By Jeff Berman, Group News Editor
December 19, 2012

Freight transportation consultancy FTR Associates reported today that its Shipper Conditions Index (SCI) showed signs of improvement for the month of October.

October’s SCI, which represents data for the most recent month available, was -5.0, which represents an almost 2 point improvement from September’s -6.9. 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.

According to FTR, the range where the SCI “settles” indicates the current status of stable but slightly tight truck capacity, adding that shippers may see a bit of deterioration in shipping conditions through the end of 2012 and throughout 2013, while freight demand slowly improves and regulations such as CSA and HOS have a negative impact on driver production and in turn capacity.

And while the capacity situation is not expected to reach what FTR called an acute phase, the firm said it will be sufficient enough to result in higher rates for shippers.

“Shippers need to be aware that the current relatively benign conditions are not expected to last,” said FTR Senior Consultant Larry Gross in the report. “The fundamentals of our economy are improving and will continue to do so unless our government snatches defeat from the jaws of victory by failing to reach a fiscal cliff agreement in a reasonably timely fashion.  Areas of strength include a recovering housing sector and low energy prices.  Changes in trucking regulations are looming although court challenges may yet throw a monkey wrench into the proceedings, delaying implementation and the resulting tightening of capacity.  But putting it all together, FTR feels the most likely outcome will be a more difficult scenario for shippers in 2013”.

In a recent interview with LM, Gross said that while there is a program in place for conditions to change that is visible, continued growth colliding with the various restrictions being programmed into certain regulations will likely create a different situation for shippers by this time next year.

“If we do in fact go off the fiscal cliff, the forecast of a tightening supply in trucking is likely obsolete as a recession could follow and there would not be as much demand,” he said. “I am assuming there is a solution and that people in Washington are not so stupid as to drive us off.”

 

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

As was the case for the second quarter, third quarter earnings results for publicly-traded less-than-truckload (LTL) carriers are again strong. Signs of solid earnings results from carriers that have posted earnings to date include tonnage increases, gains in weight per shipment and average daily shipments, higher yield, and revenue per hundredweight.

While the holiday season is known to bring good tidings and cheer to all, it may also come with another thing that is not so pleasant: higher rate freights. That was the thesis of a commentary written by Mark Montague, industry pricing analyst and chief market-watcher for DAT, a Portland, Ore.-based subsidiary of TransCore.

Earlier this week, FedEx said it is expanding its International First service for early deliveries with the addition of 31 new origin countries, which will bring the total number of origin markets for the service to 97.

Monday, December 22 is pegged as UPS's peak delivery day, as the company expects to deliver more than 34 million packages that day, adding that it expects to see six days in December top last year’s peak shipment day delivery record of 31 million packages.

The time has come again for less-than-truckload (LTL) general rate increases (GRI), with various carriers recently announced their respective rate hikes in recent days.

Article Topics

News · FTR Associates · SCI · 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