Decline in FTR index reflects challenging times for shippers

By Jeff Berman, Group News Editor
May 16, 2011 - LM Editorial

Despite data points that indicate the economy is firming, it may not always feel that way for shippers, especially these days.

That was especially true with the recent release of the Shippers’ Condition Index (SCI) from FTR Associates.

FTR reported that the current SCI reading of -11.4 reflects tightening capacity and accelerating transport costs in the form of increasing rates and diesel prices. The firm bases the SCI on “all market influences that affect shippers,” with a reading of zero reflecting a solid environment and anything below zero an unfavorable environment.

Among the things representing an unfavorable environment for shippers are the impact of tighter capacity, with base rates for major modes—and their respective fuel surcharges—on the rise, and with fuel surcharge relief possible later in the year, FTR maintains base rates are expected to continue to increase.

“This is the worst SCI reading of this cycle,” said Larry Gross, FTR senior consultant. “We are anticipating that going forward over a period of time that it is going to stabilize…at a negative level. It is some comfort to the shipper, but we are not anticipating any improvement. So much of this depends on what is going with the government and the Federal Motor Carrier Safety Administration, regarding Hours-of-Service revisions and can create a source of uncertainty.”

FTR also recently reported that its Truckers Conditions Index increased to 13.30 in March, up from February’s 9.92, due in large part to carriers getting higher rates as capacity remains tight. An index reading above zero represents an adequate trucking environment, said FTR, with a reading above 10 pointing to a good range for carriers in terms of volume, prices, and margin.

This index, said FTR, as seen consistent growth since October 2010.

FTR President Eric Starks said in a statement that during the first months of 2011, the fundamentals of the balance between the supply and demand for truck transport was obscured by the normal seasonal weakness in demand. He added that demand is expected to hold up, due to continuing strength in the manufacturing sector at a time when GDP growth is waning.

For related articles, please click here.



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

Mexico's growing importance in the continental supply chain is now being recognized by North American transportation groups

Satish Jindel, president of Pittsburgh-based SJ Consulting, says that one way for LTL carriers to improve both their bottom lines and overall productivity is to get a better grasp on the cost of handling a shipment and the pricing they have for it.

Falling 5.5 cents to $2.668 per gallon, this follows last week’s 5.9 cent decline for the lowest weekly average price going back to the week of October 14, 2009, when it was at $2.60 per gallon.

With the latest round of Trans-Pacific Partnership (TPP) negotiations in Maui, Hawaii ending without a deal, U.S. supply managers may be adjusting to other global sourcing strategies.

The PMI, the ISM’s index to measure growth fell 0.8 percent to 52.7 (a PMI of 50 or greater represents growth). PMI growth has been at 50 or higher for 31 straight months (with the overall economy growing for 74 months), and the current PMI is 1.7 percent below the 12-month average of 54.4.

Article Topics

News · Trucking · Transportation · FTR Associates · Rates · All topics

About the Author

Jeff Berman, 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.

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