Shipping Conditions Calm, But ‘Storm on Horizon’

BLOOMINGTON, IN. — FTR Associates’ Shippers Conditions Index (SCI) for March improved slightly from February’s, the company reported today.

There’s a precarious balance between trucking capacity and supply right now, FTR said “with very limited demand growth keeping shipping costs in check.”

Despite the improvement in shipping conditions, FTR reiterated their prediction that conditions will deteriorate as freight improves seasonally and regulatory changes — specifically the changes to hours-of-service — take hold.

“Storm clouds are on the horizon,” said Lawrence Gross, senior consultant for FTR. “Every indication is that the hours-of-service regulatory changes will occur as scheduled July 1, which FTR projects will reduce trucking productivity by about three percent.”

While Gross said their three percent drop in productivity is less severe than other estimates, it’s still “sufficient to tip the balance of supply and demand significantly away from shippers, assuming the economy continues to maintain at least the anemic growth levels seen recently.

“This will usher in an extended period of difficulty for shippers, as there is an array of new regulations lined up behind the HOS change that will further impact trucking in the months and even years to come.”