Bloomington, IN– FTR’s Shippers Conditions Index (SCI) improved marginally in September but remained deep in negative territory, rising 0.8 points from the previous month to a current reading of -7.9, said a report this week.
However even this small improvement in the environment affecting shippers is not expected to hold. There is mounting evidence of trucking rate increases, in addition to price increases in the spot market, as a consequence of falling productivity due to new Hours of Service rules, the report noted. Truckload carriers are reporting H.O.S. productivity losses in the range of three to five percent and Owner/Operators are exiting the industry at a time when freight tonnage is still growing. The results are expected to be ever-tightening capacity with shipping cost increases and a likely negative turn in the Shippers Conditions Index in late 2013.
“The productivity effects of the HOS revisions are coming in about where we expected and rates are beginning to move upward in response. However, we are hearing anecdotes from carriers regarding experienced drivers who are becoming fed up with the lack of flexibility and personal control over where and when they can take their extended rest period and are turning in the keys to their truck for good. We have not included such driver losses in our projections and therefore our view of the anticipated effects of the HOS revisions may have been understated,” said Larry Gross, Senior Consultant for FTR.