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Breaking a long-term decline, in a significant reversal the FTR Associates' Shippers' Condition Index (SCI) as reported in the firm's June Shippers Update improved to a reading of -5.4 from -11.4 the prior month. The healthier environment for shippers is due to a slowdown in freight demand growth thanks to the current lull in economic activity as well as further delays announced in the implementation of new federal trucking regulations. 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.
Larry Gross, senior consultant for FTR, commented on the forecast for the SCI: "The current 'soft spot' in the recovery is providing some breathing room for shippers as the growth in freight has slowed. At the same time, we have moved back our forecasts for regulation-based tightening of the supply of trucks, as the federal government has delayed the implementation of new driver regulations. This is a temporary respite in our view. The SCI will start to deteriorate once again as the economy begins to re-accelerate later this year. As the new trucking regulations begin to kick in, shipping costs will increase through 2012 with transport costs such as fuel, equipment and labor rising faster than the general rate of inflation."
The June Shippers Update includes commentary discussing the overall economic climate and regulations that will affect shipping capacity.
The Shippers Update, launched by FTR Associates during 2010 as a part of the firm's Freight Focus Series, looks at conditions that will affect the cost and efficiency of shipping goods via all transportation modes. North American shippers will find in one reference the essential information they need on freight volumes, equipment capacity and transport costs and rates. The Shippers Update has both history and forecasts for four modal options: truckload, less-than-truckload, intermodal and rail carload. The analysis includes the breakdown of total truck and rail volumes into major commodity segments. It also provides historical snapshots of inland water and air freight markets. The freight data is augmented by an abundant collection of supporting data covering macro-economics and the fuel market.
Source: FTR Associates
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