Weak Freight Environment Offsetting Capacity Constraints, says FTR

BLOOMINGTON, IN — FTR Associates’ Shippers Conditions Index (SCI) dropped slightly in June. That change, FTR said, is reflective of a relatively weak freight environment offsetting increased capacity constraints.

It also doesn’t reflect the new Hours-of-service rule, explained Lawrence Gross, senior consultant for FTR.

June’s SCI came in at -8.1. As FTR explains, any readings below zero indicate a less-than-ideal environment for shippers; readings below 10 signal that conditions for shippers are approaching critical levels based on capacity and expected rates.

FTR said they expect the index to stay within the -8.1 range for the remainder of 2013.

“We estimate that the onset of these new regulations will eventually pull about three percent of truck capacity out of the system,” Gross said of the new hours-of-service rule. “Offsetting this removal of capacity is the currently weak freight environment due to an economy that is growing slower than we had expected — or hoped. The net effect is to postpone significant tightening of capacity into later this year or even next year, depending on what happens with the economy.”


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