August 19, 2013
FTR Associates’ Shippers Conditions Index (SCI) for June fell only marginally from the previous month to a current reading of -8.1.
FTR says the minimal change reflects a relatively weak freight environment offsetting increased capacity constraints in advance of the hours of service rule implementation. The SCI also is expected to remain in a tight range close to the current reading through year end.
“The June SCI does not yet reflect the new hours of service regulations that are now the law of the land,” says Larry Gross, senior consultant at FTR. “We estimate that the onset of these new regulations will eventually pull about three percent of truck capacity out of the system.
“Offsetting this removal of capacity is the currently weak freight environment due to an economy which is growing slower than we had expected (or hoped). The net effect is to postpone significant tightening of capacity into later this year or even next year, depending on what happens with the economy.”
The Shippers Conditions Index is a compilation of factors affecting shippers transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below 10 signal that conditions for shippers are approaching critical levels, based on available capacity and expected rates, FTR says. Details of the factors affecting the June Shippers Conditions Index are found in the August issue of FTR’s Shippers Update.