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Friday, June 21, 2024

Shippers Increase Buying Leverage: FTR

(Aug. 16, 2012) – FTR Associates’ Shippers Conditions Index for June was basically unchanged from the previous month, reflecting the inability of carriers to increase rates in what is turning out to be a disappointing economic recovery.

The SCI, which remains in near neutral territory at a reading of -1.8, sums up all market influences that affect shippers. (A reading above zero suggests a favorable shipping environment, while a reading below zero is unfavorable).

FTR expects the index to shift  heading into 2013, when regulations affecting trucking fleet productivity will reduce available capacity and again put a strain on shippers’ ability to find fleets willing to haul their freight at lower rates.

“The freight markets are currently in a state of fragile equilibrium, which we expect to persist in some form through the peak shipping season,” says Larry Gross, senior consultant for FTR. “Weak economic growth is leading to very slow growth in freight demand. This is being countered by strong discipline by carriers, resulting in an environment where rates are rising quite slowly and capacity remains generally available.”