FTR Associates’ Shippers Conditions Index (SCI) for February declined by a full point from the previous month to a reading of -5.6, as demand for trucking services grew strongly in what is normally a slack month. 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. Details in FTR’s April Shippers Update, published April 9, show a still-strengthening economy which is reducing capacity available to shippers. The SCI should remain in a relatively tight range through 2012 and then fall into more negative territory as Hours of Service regulations are implemented in 2013.
Larry Gross, Senior Consultant for FTR, comments, “February was unusually strong, with demand for trucking services rising over 4% year-over-year. This effectively ‘sets the table’ for a relatively tight capacity situation going forward as demand ramps up seasonally in the coming months. We therefore expect the balance of pricing power to remain firmly on the side of the carriers for the balance of the year.”
The April Shippers Update includes discussion regarding the possible impact on the economic recovery if diesel cost reaches $5 a gallon.