BLOOMINGTON, Ind. -- Shipper conditions fell marginally in November from October to a reading of -5.3, according to the latest results from FTR Associates’ Shippers Conditions Index (SCI). FTR officials say the decline is a “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.
“Our best estimate calls for tightening capacity, but there are some important qualifications to this prediction,” said Larry Gross, senior consultant for FTR. “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.”
Gross notes that if either of the above-mentioned events were to come to pass, capacity would be “less problematic” and rate increases would be far harder to come by for truckers.