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FTR: Shippers’ lot improves

| June 15, 2011

FTR Associates on June 14 reported a significant reversal in its Shippers’ Condition Index from the prior month.

FTR says the healthier environment for shippers is due to a slowdown in freight demand growth thanks to the current lull in economic activity, as well as further delays in implementing new federal trucking regulations.

The SCI sums up all market influences that affect shippers. Larry Gross, FTR senior consultant, said the current “soft spot” in the recovery is providing some breathing room for shippers as the growth in freight has slowed.

“At the same time, we have moved back our forecasts for regulation-based tightening of the supply of trucks, as the federal government has delayed the implementation of new driver regulations,” Gross said. “This is a temporary respite in our view.”

Gross sees the SCI starting to deteriorate once again as the economy begins to reaccelerate later this year. As the new trucking regulations begin to kick in, shipping costs will increase through 2012, with transport costs such as fuel, equipment and labor rising faster than the general rate of inflation, he forecasts.

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