Transport Conditions Worsen for Shippers, Improving Rate Prospects for Truckers

FTR Associates’ Shippers Conditions Index for January slipped an additional two points since the previous report, falling to a negative 7.1, reflecting deteriorating conditions for shippers in the early months of 2013. Translated, it means that motor carriers and other transportation providers have more clout to obtain rate increases.

Slowly increasing freight volumes and capacity restraints from federal regulations affecting trucking starting this summer will worsen the situation for shippers, FTR said in a report. Thus transport costs will rise.

The Shippers Conditions Index is a compilation of factors affecting shippers and the transport world. Any reading below zero indicates a tough environment for shippers FTR said. Readings below 10 signal that conditions for shippers will be near critical levels, based on available capacity and expected rates.

Details of the factors affecting the December Shippers Conditions Index are found in the March issue of FTR’s Shippers Update published March 10.

“Our forecast for deteriorating conditions for shippers is based primarily on two assumptions: that the economy will continue to grow slowly and that there will be no further delay in the implementation of the revised Hours of Service rules in July of this year,” said Lawrence Gross, senior consultant for FTR.  “As of this time we see no cause to change either of these assumptions. 

“Field reports indicate a firming of truck rates which is unusual since winter is normally a slack period.  The courts may yet put a hold on the change in Hours of Service, but the standard for issuing an injunction is quite high.  While no one can predict what the court will do, our best assessment is that no injunction will be issued and the changes will go into effect as planned.”