Shippers Index begins to slide, Freight Index climbs
FTR Associates Shippers Conditions Index registered negative for December, reflecting a tightening capacity for shippers that is forecasted to increase dramatically as 2013 continues.
As freight continues to grow, potentially pressing federal regulations and rising costs for the trucking industry will push the reading about five points lower than the -4.9 December reading by mid-summer, according FTR.
Any reading below zero shows a tough environment for shippers, says FTR, and anything below 10 shows a critical point for shippers.
Jonathan Starks, director of transportation analysis for FTR, says carriers’ need for new equipment and drivers will push truck rates later in 2013. He also said the hours-of-service rules that take effect July 1 will impact shippers.
“The biggest transport issue that arose at the end of 2012 was the reduction in inventories,” he said. “Shipping managers will be quickly turning their attention to the looming hours-of-service changes that are scheduled for July 1. Those rules will have a varied impact on shippers depending on how their operations are currently set up. Many will take a substantial hit to the productivity of their trucking operations, some as great as a 10 percent hit.”
In a related development, the Department of Transportation announced Wednesday its ffreight transportation services index rose 1 percent in December from November – the second consecutive monthly increase.
The index’s 109.9 mark was 3.5 percent below the 114 posted in December 2011, which had been the highest in more than 20 years.