'Extended Period of Difficulty' Looms for Shippers

'Extended Period of Difficulty' Looms for Shippers

FTR Associates’ Shippers Conditions Index for March improved from February’s negative 9.5 reading to a current reading of negative 7.3, indicating a slightly better but still negative environment for shippers.

Trucking capacity and supply remain in “precarious balance” at the moment, with very limited demand growth keeping shipping costs in check, the report showed. However, shipping conditions are projected to deteriorate further as freight improves seasonally and regulatory changes kick in, restricting driver productivity.

“Current shipping conditions remain calm, but storm clouds are on the horizon,” said Lawrence Gross, senior consultant for FTR, in a written statement. “Every indication is that the hours-of-service regulatory changes will occur as scheduled July 1, which FTR projects will reduce trucking productivity by about 3 percent.”

“While our estimate of the productivity hit is less severe than some, even a 3 percent decline will be sufficient to tip the balance of supply and demand significantly away from shippers, assuming the economy continues to maintain at least the anemic growth levels seen recently,” Gross continued. “This will usher in an extended period of difficulty for shippers, as there is an array of new regulations lined up behind the HOS change that will further impact trucking in the months and even years to come.”

Complete coverage of the trucking hours-of-service debate.