Truckload linehaul rates paid in January increased 2.9% from the same time a year earlier, resulting in the largest year-over-year increase in linehaul rates since last February.
New figures from the Cass Truckload Linehaul Index show recent spot market data, combined with increasing demand and a high number of trucking companies exiting the market, all seem to indicate that rates, both contracted and in the spot market, will continue to rise.
In his January analyst report, Donald Broughton, Avondale Partners analyst said, “We believe that persistent cost pressures, relatively tepid demand, soft pricing, increasing regulatory pressure, and a less robust used truck market have taken their toll on smaller carriers over the last two years.”
As a result, the number of trucking companies that went out of business in 2013 exceeded that of the prior two years combined.
The report also shows total truck tonnage and average weight per load are both rising, with fourth quarter 2013 figures showing tonnage was up almost 10% compared to the same time in 2012.
The index measures market fluctuations in per-mile truckload pricing and isolates the linehaul component of full truckload costs from other components, such as fuel and accessorials, for a reflection of trends in baseline truckload prices. Data within it is derived from actual freight invoices paid on behalf of Cass’ clients
Meantime, the Cass Intermodal Price Index shows intermodal cost per mile in January increasesd 1.7% from the same time in 2013.
Intermodal volume has also been increasing, with the Association of American Railroads reporting hikes of 6.8%, 7.8%, and 8% in October, November and December, respectively.
“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 increase modestly in 2014 if truckload capacity continues to be squeezed,” according to Broughton.
The Cass Intermodal Price Index is an indicator of market fluctuations in per-mile U.S. domestic intermodal costs, that includes all costs, such as linehaul, fuel and accessorials. It is derived from actual freight invoices paid on behalf of Cass’ clients.