FTR’s Shippers Condition Index reflects a flat outlook for shippers

By Jeff Berman, Group News Editor
November 20, 2012 - LM Editorial

The business conditions outlook for shippers appears to continue to be moving sideways, according to the monthly Shippers Conditions Index (SCI) from freight transportation consultancy FTR Associates.

The SCI for September, the most recent month for which data is available, was -6.9, which FTR said was almost exactly in line with August. 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.

“Shippers continue to enjoy a period of stability and limited increases in trucking rates for the moment,” said Larry Gross, FTR senior consultant, in the report. “Uncertainty with regard to the future will continue at high levels until the outcome of ongoing ‘fiscal cliff’ negotiations becomes clear. We are optimistic that the results of these discussions will not inflict great damage to the economy. With the re-election of President Obama, we can expect the current regulatory climate to remain in place. The conditions are therefore set for slow tightening in freight markets as we move through next year.”

In an interview with LM, Gross explained that this report accentuates how while conditions have not changed, it stands to reason they will.

While there is a program in place for conditions to change that is visible, Gross said that 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

The PMI, the ISM’s index to measure growth, increased 1.8 percent to 57.1 in July. This is 1.8 percent higher than the 12-month average of 55.3. The PMI has grown in 18 of the last 20 months, with economic activity in the manufacturing sector expanding for the last 14 months as the overall economy was up for the 62nd consecutive month.

YRC Worldwide, whose regional and long-haul units provide the second-largest LTL capacity in the trucking industry, narrowed its second-quarter loss to $4.9 million on $1.32 billion revenue, compared with $15.1 million loss on $1.24 billion revenue in the year-ago quarter.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

Article Topics

News · Trucking · FTR Associates · SCI · 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 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA