FTR: Shippers index falls

| September 23, 2011

FTR Associates Sept. 22 announced its Shippers Condition Index edged lower in July.

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 July reading was -3.8.

After a brief term of improving conditions for shippers, FTR said the SCI once again has begun to fall as had been expected. The deterioration reflects the current trucking situation in which demand has matched available fleet capacity, leaving little room for even modest seasonal increases in activity. FTR is forecasting a declining environment for shippers through the remainder of this year and well into 2012.

Larry Gross, FTR senior consultant, said, “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, Gross said, 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.”