Shipping Conditions to Worsen in 2013

NASHVILLE, IN. — The Shippers Condition Index for October may have improved before possible “deterioration” in 2013, but shipping conditions will still decrease throughout 2013, said the Freight Transportation Associates (FTR).

FTR said the month-over-month index reported October shipping conditions had improved by nearly two points, coming to a positive reading of -5.0.

But despite this, the combination of new trucking regulations and slowly rising freight volumes will cause a tightening of capacity, FTR warned.

And though the capacity situation is not expected to reach an “acute” phase, FTR said it will be sufficient to result in higher rates for shippers.

“Shippers need to be aware that the current relatively benign conditions are not expected to last,” said Larry Gross, senior consultant for FTR.

The fundamentals of the economy are improving and will continue to do so, Gross added, unless the government fails to reach a fiscal cliff agreement in a reasonably timely fashion.

Gross also pointed out that areas of strength in the economy include a recovering housing sector and low energy prices, however encouraged shippers to remain alert in the New Year.

“Changes in trucking regulations are looming although court challenges may yet throw a monkey wrench into the proceedings, delaying implementation and the resulting tightening of capacity. But putting it all together, FTR feels the most likely outcome will be a more difficult scenario for shippers in 2013,” he said.

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