Shippers Index Reflects Coming Capacity Constraints, says FTR

BLOOMINGTON, IN — FTR Associates’ Shippers Conditions Index (SCI) for December was -4.9, a reading that reflects tightening capacity, FTR said.

As transport costs rise and new regulations reduce trucking capacity, FTR is expecting the SCI reading to drop another five points from where it is now by mid-summer.

“Despite recent problems emanating from issues at the federal level, most indicators point to continued modest growth in both the economy and freight markets,” said Jonathan Starks, director of transportation analysis for FTR.

“The biggest transport issue that arose at the end of 2012 was the reduction in inventories. Shipping managers will be quickly turning their attention to the looming Hours-of-Service (HOS) changes that are scheduled for July 1. Those rules will have a varied impact on shippers depending on how their operations are currently set up. Many will take a substantial hit to the productivity of their trucking operations — some as great as a 10 percent hit. The need for additional equipment and drivers will create additional pressure for truck rates to move higher later in the year.”