Fleets appear to be hauling all the freight they can accommodate, according to the FTR Associates’ Shippers Condition Index (SCI).
What is good news for carriers (all the business they can handle) is not so good news for shippers. As reported in the September Shippers Update edged lower in July to a current reading of -3.8. 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.
FTR is forecasting trailer availability will continue to be tight for shippers through the remainder of this year and well into 2012. The market research company says that demand has completely utilized the available fleet capacity, leaving little room for even modest seasonal increases in activity.
“Events are unfolding as we had projected with regard to shipping conditions,” says Larry Gross, senior consultant for FTR. “Carriers have right-sized to meet current demand levels and are reluctant to add capacity given the high level of economic uncertainty. Moreover, tightening driver availability means that even those truckers that wish to add capacity are finding it difficult to do so. The result is higher freight rates even in the face of the soft economy. We expect this situation to persist into next year as expected new government trucking regulations will reduce the productivity of the trucking industry and therefore its effective capacity.”
The September Shippers Update includes commentary discussing the possibility that the swing in pricing power from shippers to truckers could be a long-term trend. For more information about how to subscribe to the Shippers Update, send an e-mail to email@example.com or call 888-988-1699 ext. 1.