Linehaul rates for truckload shipping continue to rise, according to the latest Cass Linehaul Rate Index.
On average, North American shippers paid 7.2% more in July of this year than last in their truckload linehaul rates.
With the concentrated 2014 bid season now over, and more than 95% of the public carriers’ freight based on contract rates, it is likely that the new contracts contain significantly higher rates than the ones they replaced, according to the investment firm Avondale Partners, which partners with Cass Information Systems to publish the index.
“The message on supply and demand is the same, freight volumes are growing, despite a June decline that should prove to be a brief seasonal dip, and capacity continues to shrink as a high number of carriers are exiting the business,” said Avondale.
When it comes to rate expectations, Avondale Partners said, “We continue to expect truckload pricing to rise 4-6% in 2014, with the higher end looking increasingly likely.”
Meantime, intermodal shippers also continue to see increased transportation costs in 2014, with all-in intermodal costs up 3.4% in July year over year, according to the Cass Intermodal Price Index.
“We now expect intermodal rates to increase at a low single digit pace in 2014 as a tighter truckload environment offers an umbrella for higher pricing,” said Avondale. “We would also note that diesel has been up on a year over year basis for four straight months, which has contributed somewhat to the upward momentum in our 'all-in' intermodal price index.”
Avondale noted from a volume perspective, the American Association of Railroads reported that U.S. intermodal volumes were up 8% in May, 7% in June, and 5% in July compared to last year.
The Cass Intermodal Price Index is indicator of market fluctuations in per-mile U.S. domestic intermodal costs, including all costs associated with the move such as linehaul, fuel and accessorials.
The Cass Truckload Linehaul Index is an indicator of market fluctuations in per-mile truckload pricing that isolates the linehaul component of full truckload costs from other components, such as fuel and accessorials.
Data within both are derived from actual freight invoices paid on behalf of Cass’ clients, which totaled over $23 billion in 2013.