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It’s Not Recovery (But It’s Not Bad)

Sept. 13, 2016
With the new capacity-constraining regulations not yet in effect, shippers should enjoy the relative calm shipping conditions while they can.

The Shippers Conditions Index (SCI), a measurement compiled by transportation analyst firm FTR that indicates the favorability (or otherwise) of current transportation conditions, came in at -0.7 for the month of June. Any reading below zero indicates a less-than-ideal environment for shippers, so a negative score normally isn’t something to get too excited about.

According to FTR, though, a score that’s almost at a neutral reading “is sure to feel favorable to shippers in comparison to the many difficulties experience last year” (see chart below). For that matter, -0.7 is more than 2.0 full points higher than the -2.8 score from the previous month. As FTR’s analysis indicates, June’s score 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.

“There is always uncertainty associated with a forecast,” says Larry Gross, partner at FTR, “but our prediction for tightening truck capacity comes with two very important caveats: first—that the economy does not slow further from the current, anemic growth rate; and second—that there is no delay or interruption in the Federal truck regulatory agenda.”

According to Gross, the litigation currently underway against the electronic logging device (ELD) regulation by the Owner Operators Independent Driver Association (OOIDA) could potentially derail the regulatory train if the court were to decide to issue an injunction. A hearing will be held in September.

“Meanwhile,” Gross adds, “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.”

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