Tuesday, August 16, 2011

Slight Improvement in FTR Conditions Index

In June, -3.1 became the current reading for the FTR Associates’ Shippers Condition Index. The SCI summed up the market influences that affect freight and auto shippers. In order to have a positive shipping atmosphere, the reading must be above zero and anything under zero is insufficient. Even though this index is below zero, its condition is improving because in March, the index was at -11.4. This “low” slowed down the shippers in economic and freight growth in late spring and early summer causing a slowing in the rise of rates; causing an ease in the strain in capacity. The downside to the situation is that the SCI has decreased each month when it comes to there rate of improvement. Sadly, the FTR is predicting the index to fall again which will end up impacting the shippers in a bad way. Larry Gross, the senior consultant for FTR, thinks it may be counterintuitive by saying that rate increases are going to improve. The trucking companies have had solid rate increases, even while the GDP growth has been down, shows that freight demand and capacity are good. The FTR is expecting an increase and they are still going to be watching for a decrease in the upcoming months.

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