FTR Shippers Conditions Index Steady in July
October 02, 2013
FTR's Shippers Conditions Index for July, with a reading of -8.3, was basically unchanged from the previous month reflecting relatively modest freight volume growth combined with some capacity constraints caused by new regulations.
The SCI is expected to remain in a tight range close to the current reading until increased regulatory drag negatively affects capacity and spurs rate increases in 2014.
The SCI is a compilation of factors affecting shippers transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below 10 signal that conditions for shippers are approaching critical levels based on available capacity and expected rates.
Jonathan Starks, director of transportation analysis for FTR, commented: "Truck capacity has been able to readily adjust to any increases in demand due to the slow growth environment that has characterized this recovery. If freight demand shows any sort of surge over the next few quarters it will become much more difficult for shippers to find the spare capacity to keep operations flowing smoothly.
"With so little spare capacity in the truck environment at any given time we believe that rates will be moving higher during the fall peak, and once again during the spring."