FTR Associates' Shippers Condition Index edged lower in July to a current reading of -3.8, meaning conditions were favorable for higher rates for truckers.


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. After a brief term of improving conditions for shippers, FTR's SCI has now once again begun to fall as had been expected.

The deterioration reflects the current trucking situation in which demand has completely utilized the available fleet capacity leaving little room for even modest seasonal increases in activity. FTR is forecasting a declining environment for shippers through the remainder of this year and well into 2012.

"Events are unfolding as we had projected with regard to shipping conditions," said Larry Gross, Senior Consultant for FTR. "Carriers have 'right-sized' to meet current demand levels and are reluctant to add capacity given the high level of economic uncertainty. Moreover, tightening driver availability means that even those truckers that wish to add capacity are finding it difficult to do so. The result is higher freight rates even in the face of the soft economy.

"We expect this situation to persist into next year as expected new government trucking regulations will reduce the productivity of the trucking industry and therefore its effective capacity."

The Shippers Update, launched by FTR Associates during 2010 as a part of the firm's Freight Focus Series, looks at conditions that will affect the cost and efficiency of shipping goods via all transportation modes.