FTR Associates’ monthly Shippers Condition Index rose this month, indicating that market influences affecting shippers are becoming less unfavorable.
The index’s July reading improved to minus 3.6 from minus 5.4 in June. A reading below zero suggests an unfavorable shipping environment.
“The improvement in the SCI must be regarded as a mixed bag in that it is the result of tepid demand from shippers and therefore is a product of the current softness in the economy,” said Larry Gross, chief consultant for FTR.
“While most shippers are currently seeing sufficient capacity to haul their goods, this will soon begin to change,” Gross said. “Truckload rates will begin to move upward again during the fall shipping season, and are expected to rise dramatically in 2012 as new regulations are implemented, putting a drag on the entire trucking segment.”
Assuming the economy improves as many expect in the second half of the year, the SCI is projected to deteriorate again as growing freight demand strains carrier capacity, Gross said.
“Of course, all of these projections would be thrown into question in the event of a failure in the federal debt ceiling negotiations or some other external shock to the economy,” he said.