FTR: Shipping environment hinges on revised hours rule

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FTR Associates on Thursday, Dec. 15, announced that its Shippers Conditions Index improved in October by 1.1 points from the previous month to a current reading of -3.6. 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.

FTR sees the current environment for shippers as stable through early 2012 with only modest increases in costs and acceptable available capacity levels. However, FTR cautions that shippers could start to experience a much more negative environment as early as mid-2012 depending on the ultimate outcome of the hours-of-service revision process currently under way.

“There is more than the usual amount of uncertainty in the outlook for shippers at the moment, as it appears that we are finally approaching the hour when the FMCSA will issue its much-anticipated revised rules for trucking hours of service,” says Larry Gross, FTR senior consultant. “While court challenges are inevitable regardless of how the new rule reads, the publishing of the new rules and the proposed implementation schedule will begin to provide some much-needed clarity on the contours of 2012 and the driver supply.”

Gross says FTR’s current assumption is that the revised rule will take effect in late 2012 and will have a substantial negative effect on shipping conditions. “However, any prediction of the results of our current political process is necessarily fraught with uncertainty,” he says. “FTR will closely examine the product of the rulemaking process when it emerges, and it is possible that our view of 2012 could change substantially as a result.”