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FTR Shippers Conditions Index Edges Higher in September

November 19, 2013

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Even though FTR's Shippers Conditions Index improved marginally in September along with a small improvement in the environment affecting shippers it is not expected to hold.

There is mounting evidence of trucking rate increases, in addition to price increases in the spot market, as a consequence of falling productivity due to new hours-of-service rules. Truckload carriers are reporting HOS productivity losses in the range of 3% to 5% and owner-operators are exiting the industry at a time when freight tonnage is still growing. The results are expected to be ever-tightening capacity with shipping cost increases and a likely negative turn in the Shippers Conditions Index in late 2013.

The FTR SCI for September remained deep in negative territory, rising 0.8 points from the previous month to a current reading of -7.9.
 
Larry Gross, senior consultant for FTR, commented: "The productivity effects of the HOS revisions are coming in about where we expected and rates are beginning to move upward in response.

"However, we are hearing anecdotes from carriers regarding experienced drivers who are becoming fed up with the lack of flexibility and personal control over where and when they can take their extended rest period and are turning in the keys to their truck for good. We have not included such driver losses in our projections and therefore our view of the anticipated effects of the HOS revisions may have been understated."
 

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