Bloomington, Ind.– FTR’s Shippers Conditions Index (SCI) for December, at -6.9, is a decline from the previous month, halting a short period of improvement through November, said a report.
FTR expects the index to rise modestly through the first quarter of 2014 due to moderating regulatory pressure. However, severe winter weather, when combined with the onset of the spring shipping season, could put pressure on trucking capacity, negatively impacting the index.
“After seeing decent economic growth to end 2013, 2014 has started off by taking a few blows. First came the severe winter weather that put a significant cramp on both transport capacity and on production days for much of the U.S. This is likely to be a short-term impact as we get past the worst of the weather woes, but it does highlight the fact that there is very little excess capacity in the truck markets. We will know very shortly when the spring shipping season starts if it will be a bigger than expected issue. With only modest economic and freight growth expected to occur during most of the year, our best estimate is that we will be able to skirt any significant issues. However, if the economy (especially manufacturing) shows any sort of hot spell during the year, there is a real likelihood that capacity will be insufficient for many shippers and competition for truckers (aka pricing) will rise rapidly,” said Jonathan Starks, FTR’s Director of Transportation Analysis.
The Shippers Conditions Index is a compilation of factors affecting shippers’ transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below 10 signal that conditions for shippers are approaching critical levels, based on available capacity and expected rates.