Shippers Conditions Index Drops, Pointing to 2013 Environment

BLOOMINGTON, IN — In what FTR Associates is calling a “precursor to a more challenging environment for shippers in 2013”, FTR’s Shippers Conditions Index (SCI) fell marginally in November to -5.3.

Pending U.S. truck safety regulations, plus slow economic and freight growth, combined with the trucking industry’s reluctance to add capacity, is all pointing towards tighter conditions and rising truck rates in the second half of 2013, FTR said.

“Our best estimate calls for tightening capacity, but there are some important qualifications to this prediction,” explained 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. 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.”

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