FTR's Shippers Conditions Index Begins Expected Decline
January 21, 2013
FTR Associates Shippers Conditions Index for November fell marginally from October to a reading of -5.3, the precursor to what is expected to be a more challenging environment for shippers -- meaning more leverage for truckers -- in 2013.
The transportation forecasting firm projects that the combination of pending government truck safety regulations, continued slow growth in the economy and freight, and the reluctance of the trucking industry to add capacity will result in tighter conditions and rising truck rates towards the second half of the year.
Our best estimate calls for tightening capacity, but there are some important qualifications to this prediction," says Larry Gross, senior consultant for FTR.
"Firstly, we are assuming that the current Washington gridlock does not result in a showdown that damages the recovery and derails the current slow-growth path. Secondly, we are making the assumption, based on the best information we currently have available, that pending court challenges to the Hours of Service revisions will not result in a court injunction, and that the revisions will go into effect as scheduled on July 1.
"If either of these events were to come to pass, then the capacity situation will be less problematic and rate increases will be far harder to come by for truckers.
The Shippers Update, launched by FTR Associates during 2010 as a part of the firms Freight Focus Series, looks at conditions that will affect the cost and efficiency of shipping goods via all transportation modes.