Shippers Index Neutral, Slow Growth in Freight Demand

Nashville, IN — FTR Associates says their Shippers Conditions Index (SCI) stayed relatively unchanged from May to June, and remains in “near neutral territory” with a reading of -1.8. (A reading above zero means a favorable environment for shippers, below zero unfavorable.)

That reading, said FTR, shows the “inability of carriers to increase rates in what is truning out to be a disappointing economic recovery.”

And while shippers may be holding their own right now, FTR said that the index is expected to fall into 2013 when regulations affecting fleet productivity kick in; available shipping capacity will reduce and put a strain on shipper’s ability to find fleets willing to haul freight at rates that are in their best interests.

“The freight markets are currently in a state of fragile equilibrium, which we expect to persist in some form through the peak shipping season,” Larry Gross, senior consultant for FTR.

“Weak economic growth is leading to very slow growth in freight demand. This is being countered by strong discipline by carriers, resulting in an environment where rates are rising quite slowly and capacity remains generally available.”

 

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