Shippers Condition Index resumes expected decline

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Updated Sep 23, 2011

FTR Associates’ Shippers Condition Index (SCI) 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.

After a brief term of improving conditions for shippers, FTR says the SCI has now once again begun to fall as had been expected. The deterioration reflects the current trucking situation in which demand has completely utilized the available fleet capacity leaving little room for even modest seasonal increases in activity.

FTR says it is forecasting a declining environment for shippers through the remainder of this year and well into 2012.

“Events are unfolding as we had projected with regard to shipping conditions.  Carriers have ‘right-sized’ to meet current demand levels and are reluctant to add capacity given the high level of economic uncertainty,” says Larry Gross, senior consultant for FTR. “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, FTR says.

For more information about how to subscribe to the Shippers Update, send an e-mail to sales@ftrassociates.com or call 888-988-1699 ext. 1.

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