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Sep 17, 2012 3:09 PM

FTR Associates’ Shippers Conditions  Index (SCI) for July fell to a reading of -4.5, starting the expected steady  decline as shippers and carriers feel the impact of increased regulatory drag  heading into 2013. 

The SCI sums up all market  influences that affect shippers; a reading above zero suggests a favorable  shipping environment, while a reading below zero is unfavorable.

The current period begins what FTR  characterizes as an inflection point where costs and rates will begin moving up  if the U.S. economy continues to sustain a relatively healthy freight market as  new regulations take hold.   The forecasted tightening of capacity  and associated increased shipping costs will continue to negatively impact the  Shippers Conditions Index unless the economy slows more than expected.   Details of the factors affecting the July Shippers Conditions Index are found  in the September issue of FTR’s Shippers Update published September 10,  2012.

“FTR’s base outlook calls for  shipping conditions to deteriorate as freight volume grows slowly and  government regulations are implemented, adversely affecting driver  productivity,” said Larry Gross, Senior Consultant for FTR, commented. “This  assumes that the Euro crisis remains contained and that the Federal government  does not drive the economy off the “fiscal cliff” at year-end.  If either  scenario occurs, we would consider a recession likely, causing freight demand  to drop and eliminating any potential capacity issues and driving improvement  in shipping conditions.”

The current issue discusses  downside economic scenarios.  For more information about how to subscribe  to the Shippers Update, send an e-mail to sales@ftrassociates.com or call 888-988-1699 ext. 1.