FTR Associates’ Shippers Conditions Index (SCI) for December had a reading of -4.9, reflecting tightening capacity that is expected to get significantly worse by mid-2013.
Transport costs will continue to rise as freight continues to grow and new federal regulations reducing trucking capacity kick in, with the SCI reading expected to be about five points lower than the current reading by mid-summer.
The Shippers Conditions Index is a compilation of factors affecting shippers transport environment. 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 published February 8.
“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 (HOS) changes that are scheduled for July 1st. 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.”
Commentary included in the current issue of the Shippers Update explores the impacts of several notable updates to FTR’s data. For more information about how to subscribe to the Shippers Update, send an e-mail to [email protected] or call 888-988-1699 ext. 1.