Fleet Management

Truckload Linehaul Rate Increasing, Intermodal Forecast Higher

March 13, 2014

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Truckload linehaul rates continue to rise, according to the Cass Truckload Linehaul Index.

February saw costs that were 2.8% higher than the same month last year. And while, on average, truckload rates fall 0.5% from January to February, this year only saw a 0.1% decline during the period.

With demand increasing and capacity decreasing, along with the last two quarters showing an unusually high number of carriers exiting the business, capacity is tight, according to the investment firm Avondale Partners, which provides analysis of the index.

It notes the 2014 bid season, which is well under way, is expected to be a tough one for shippers, meaning it’s encouraging for trucking. Transportation sector analysts are forecasting rate increases between 3% and 6% in 2014, according to Avondale Partners.

Meantime, the Cass Intermodal Price Index shows throughout most of 2013, intermodal freight costs held steady with, or even fell below, costs from the year before. Its forecast 2014, however, will likely shape up differently, with intermodal costs consistently coming in higher than comparative 2013 levels.

January costs were 1.7% higher than the prior year, and February saw costs 1.4% higher than last year.

The capacity problem for truckload freight is pushing more loads toward intermodal, likely causing some upward pull on intermodal pricing. “Although we expect the pricing dynamic in intermodal to remain competitive and see linehaul rates remaining relatively flat in the near term, we do believe that intermodal pricing could improve modestly in 2014 if truckload capacity continues to be squeezed,” said Avondale Partners.

The linehaul index provides indications of market fluctuations in per-mile truckload pricing. It isolates the linehaul component of full truckload costs from other components, such as fuel and accessorials. The intermodal index includes all per-mile costs associated with the move.

Data within both is derived from actual freight invoices paid on behalf of Cass’ clients.

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