FTR Associates’ Shippers Conditions Index (SCI) for January slipped an additional two points, falling to a reading of negative 7.1, reflecting deteriorating conditions for shippers in the early months of 2013.
The SCI is forecast to continue to move downward as the year progresses and is expected to reach negative double digit levels by year-end, indicating very difficult conditions for shippers. Transport costs will increase as freight continues to grow slowly and capacity is constrained by federal regulations affecting trucking starting this 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 March issue of FTR’s Shippers Update published March 10.
“Our forecast for deteriorating conditions for shippers is based primarily on two assumptions: that the economy will continue to grow slowly and that there will be no further delay in the implementation of the revised Hours of Service rules in July of this year,” said Lawrence Gross, Senior Consultant for FTR. “As of this time we see no cause to change either of these assumptions. Field reports indicate a firming of truck rates which is unusual since winter is normally a slack period. The courts may yet put a hold on the change in Hours of Service, but the standard for issuing an injunction is quite high. While no one can predict what the court will do, our best assessment is that no injunction will be issued and the changes will go into effect as planned.”
Commentary included in the current issue of the Shippers Update explores the impacts “sequestering” on the current economic recovery. 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.