Transportation forecasting firm FTR Associates has announced that its Shippers Conditions Index (SCI) for March eased from February’s level of a -9.5 reading to a current reading of -7.3. That, said FTR, points to a “slightly improved but still negative environment for shippers.
The 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.
According to FTR, trucking capacity and supply “remain in precarious balance at the moment, with very limited demand growth keeping shipping costs in check.”
What’s more, added FTR, shipping conditions are “projected to deteriorate further” as freight improves seasonally and the Hours of Service rule changes go into effect (July 1st), which are expected to reduce driver productivity.
“Current shipping conditions remain calm but storm clouds are on the horizon,” stated FTR senior consultant Lawrence Gross. “Every indication is that the Hours of Service regulatory changes will occur as scheduled July 1, which FTR projects will reduce trucking productivity by about 3%.
“While our estimate of the productivity hit is less severe than some, even a 3% decline will be sufficient to tip the balance of supply and demand significantly away from shippers, assuming the economy continues to maintain at least the anemic growth levels seen recently,” he continued.
“This will usher in an extended period of difficulty for shippers,” Gross added, “as there is an array of new regulations lined up behind the HOS change that will further impact trucking in the months and even years to come.”