FTR Associates Reports Low Shippers Conditions Index for November Start of 2013 Decline

FTR Associates reports that the slight decline in the Shippers Conditions Index for November is an indicator of the expected decline for 2013.

FTR Associates’ Shippers Conditions Index (SCI) for November fell marginally from October to a reading of -5.3, the precursor to what is expected to be a more challenging environment for shippers in 2013. FTR projects that the combination of pending government truck safety regulations, continued slow growth in the economy and freight, and the reluctance of the trucking industry to add capacity will result in tighter conditions and rising truck rates towards the second half of the year. Details of the factors affecting the November SCI are found in the January issue of FTR’s Shippers Update published January 10, 2013.

Larry Gross, Senior Consultant for FTR, comments, “Our best estimate calls for tightening capacity, but there are some important qualifications to this prediction. Firstly, we are assuming that the current Washington gridlock does not result in a showdown that damages the recovery and derails the current slow-growth path. Secondly, we are making the assumption, based on the best information we currently have available, that pending court challenges to the Hours of Service revisions will not result in a court injunction, and that the revisions will go into effect as scheduled on July 1. If either of these events were to come to pass, then the capacity situation will be less problematic and rate increases will be far harder to come by for truckers.”

Commentary included in the current issue of the Shippers Update looks at the probable impact on transportation of the latest “fiscal cliff” deal.