FTR’s Shippers Conditions Index (SCI) for June, at a near-neutral reading of -0.7, reflects slow freight growth typical of late recovery status and a lull in the new capacity-constraining regulations that are not in effect as of yet. Even though the SCI is only modestly positive at the moment, it is sure to feel favorable to shippers in comparison to the many difficulties experienced last year.
FTR forecasts that the index will soon start a downward trajectory as regulatory drag is factored in later in 2016 and into 2017. The Shippers Conditions Index is a compilation of factors affecting the shippers transport environment. Any reading below zero indicates a less-than-ideal environment for shippers. Readings below -10 signal conditions for shippers are approaching critical levels, based on available capacity and expected costs.
Larry Gross, partner at FTR, said: “There is always uncertainty associated with a forecast, but our prediction for tightening truck capacity comes with two very important caveats: firstly--that the economy does not slow further from the current, anemic growth rate; and secondly--that there is no delay or interruption in the Federal truck regulatory agenda.
“The litigation currently underway against the Electronic Logging Device regulation by the Owner Operators Independent Driver Association (OOIDA) holds the potential for derailing the regulatory train if the court were to decide to issue an injunction. A hearing will be held in September. Meanwhile, the White House has approved the release of a draft speed limiter regulation which, depending on how it reads, may put an additional large dent in truck capacity when and if it is implemented, probably in 2018.”