FTR Associates’ Shippers Conditions Index for February declined by a full point from the previous month to a reading of -5.6, as demand for trucking services grew strongly in what is normally a slack month.
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.
April’s Shippers Update shows a still-strengthening economy that is reducing capacity available to shippers. FTR says the SCI is expected to remain in a relatively tight range through 2012 and then fall into more negative territory as hours-of-service regulations are implemented in 2013.
“February was unusually strong, with demand for trucking services rising over 4 percent year-over-year. This effectively sets the table for a relatively tight capacity situation going forward as demand ramps up seasonally in the coming months. We therefore expect the balance of pricing power to remain firmly on the side of the carriers for the balance of the year,” says Larry Gross, FTR senior consultant.
According to FTR, the April Shippers Update also includes discussion regarding the possible impact on the economic recovery if diesel cost reaches $5 per gallon.