FTR Associates’ Shippers’ Condition Index (SCI) has continued to decline, which FTR says reflects tightening capacity in the trucking sector. The short term forecast for the SCI calls for continued deterioration from the current reading of -7.7 as the outlook for capacity shortages worsens. 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 SCI Index is moving into territory that we have not seen since 2004. Now that we are emerging from the slow winter season the dimensions of the effects of tightening capacity are beginning to come into focus,” says Larry Gross, senior consultant for FTR. “Shippers are being hit in two ways as both base rates are moving higher for all major modes and fuel surcharges are surging, the latter reflecting oil price hikes stemming from the worrying Mideast unrest and its potential effect on supply. While there might be some relief later in the year on fuel surcharges, we expect base rates to continue to increase.”
The SCI is included in the April Shipper’s Update, produced by FTR. This month’s edition also includes commentary on how fuel prices and the currently situation in Japan may impact the economic recovery.