FTR Associates’ Shippers Conditions Index (SCI) continued to rest in substantially negative territory in August with a reading of -8.7. The SCI has slowly declined through the summer months reflecting the offsetting forces of lost trucking productivity and capacity due to the revised Hours of Service regulations on trucking capacity versus relative modest freight demand and moderating fuel costs. For the time being shipping rates continue to be held in check. The SCI is expected to remain in a tight range close to the current reading through October or possibly November.
Larry Gross, Senior Consultant for FTR, comments, "Early Q3 financial reporting by the publicly traded large motor carriers appears to be confirm that the HOS changes are hurting productivity and raising trucker's operating costs. However, carriers are still finding it difficult to pass these costs along to shippers due to lackluster demand for freight. We expect that rates will eventually begin to respond to this cost pressure and begin to rise, but perhaps not before next year."
The Shippers Conditions Index is a compilation of factors affecting shippers transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below 10 signal that conditions for shippers are approaching critical levels, based on available capacity and expected rates.
