Aftermarket

FTR Shippers Condition Index Falls Significantly

May 13, 2011

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FTR Associates' Shippers' Condition Index as reported in the firm's May Shippers Update fell significantly to a reading of -11.4, reflecting tightening capacity and accelerating transport costs.
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 recent sharp deterioration in the SCI reflects the twin pressures of tightening capacity and rising fuel surcharges," said Larry Gross, Senior Consultant for FTR. "Looking ahead, with the slower recent growth in the economy, we are expecting the SCI to begin to stabilize and would not be surprised to even see some modest improvement in the next few months. Such improvement would not, however, change our basic outlook for a difficult environment for shippers through the end of this year and well beyond."

The tight shipping conditions are likely to create a rise in shipping rates. This is good news for carriers, which have faced increasing costs due to the recent fuel spike and other factors.

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