FTR Associates reported this week that its Shippers Conditions Index (SCI) fell once again in February, bringing the current reading to -9.5. And they expect 2013 to get much worse.
February's two point drop wasn't a surprise as FTR has been forecasting the decline for some time. Going forward, they expect the next few months to be "choppy" before further deterioration begins in the second half of 2013
That dark forecast has much to do with changing hours-of-service rules in the U.S. that they believe will reduce driver productivity, tightening capacity. The hours-of-service rules is the next step in what FTR said they expect to be "the largest wave of trucking safety regulations in history."
While the near-term path of the economy is murky, said Lawrence Gross, Senior Consultant for FTR, shippers need to prepare for a difficult third and fourth quarter this year.
"If the current path of slow economic growth remains intact and the courts do not delay the implementation of the new hours-of-service framework (a development we view as increasingly unlikely), then the stage will be set for a significant tightening of truck capacity, resulting in reduced service levels and higher rates. While the situation is similar in some respects to the last such occurrence in 2004, there is one important difference. While 2004 was a relatively short-term blip, we believe that 2013 will be the door-opener for a prolonged period of difficulties that could last several years."
