Shippers index suggests tightening capacity

Feb. 13, 2013

The latest Shippers Conditions Index (SCI) from FTR Associates indicates continued tightening of capacity for shippers.

The December SCI came in with a reading of -4.9. FTR said the trend is for continued tightening through the middle of this year with the SCI reading about five points lower by mid-summer.

The Shippers Conditions Index is a compilation of factors affecting shippers’ transport environment, FTR said. Any reading below zero indicates a tough environment for shippers. Readings below 10 signal that conditions for shippers will be near critical levels, based on available capacity and expected rates.

Details of the factors affecting the December Shippers Conditions Index are found in the February issue of FTR’s Shippers Update.

“Despite recent problems emanating from issues at the federal level, most indicators point to continued modest growth in both the economy and freight markets,” said Jonathan Starks, director of transportation analysis for FTR. “The biggest transport issue that arose at the end of 2012 was the reduction in inventories. 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% hit. The need for additional equipment and drivers will create additional pressure for truck rates to move higher later in the year.”

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