May 14, 2013
FTR Associates’ Shippers Conditions Index (SCI) for March eased from February’s -9.5 reading to a current reading of -7.3, indicating a slightly improved but still negative environment for shippers.
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.
Trucking capacity and supply remain in precarious balance at the moment, with very limited demand growth keeping shipping costs in check. However, shipping conditions are projected to deteriorate further as freight improves seasonally and regulatory changes kick in, restricting driver productivity. Details of the factors affecting the March Shippers Conditions Index are found in the May issue of FTR’s Shippers Update published May 10.
“Current shipping conditions remain calm but storm clouds are on the horizon. Every indication is that the Hours of Service regulatory changes will occur as scheduled July 1, which FTR projects will reduce trucking productivity by about 3 percent,” Lawrence Gross, Senior Consultant for FTR, says. “While our estimate of the productivity hit is less severe than some, even a 3 percent decline will be sufficient to tip the balance of supply and demand significantly away from shippers, assuming the economy continues to maintain at least the anemic growth levels seen recently. This will usher in an extended period of difficulty for shippers, as there is an array of new regulations lined up behind the HOS change that will further impact trucking in the months and even years to come”