Capacity tightening, FTR Shippers Condition Index shows

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Updated Feb 16, 2011

Freight Bottleneck

FTR Associates announced Tuesday, Feb. 15, that it has lowered its Shippers Condition Index to reflect tightening carrier capacity, particularly in the truckload sector. The SCI sums up all market influences that affect shippers; a reading above zero suggests a favorable shipping environment, while a reading below zero is unfavorable. January’s -8.8 reading is the most negative (unfavorable) reading for shippers yet seen during the current recovery.

“The downward progression of the SCI should serve as a warning signal to shippers,” says Noel Perry, senior consultant for FTR. “While trucking capacity is currently adequate during the normally slack winter shipping season, looking forward we expect things to tighten up dramatically as freight demand picks up beginning in March.”

Perry says a shortage of truck drivers, due in part to new government safety regulations, will be the key factor restricting the ability of motor carriers to expand capacity, resulting in higher rates and possible challenges in getting freight moved later in the year.