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Truckload Linehaul Rates Up from Year Ago, Intermodal Drop Continues

November 23, 2015

By Evan Lockridge

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A measure of truckload rates moved higher in October from the same time last year, while intermodal rates continued moving lower, according to newly released figures.

The Cass Truckload Linehaul Index posted a 1.9% increase in October, and the reading of 127.4 remains at its highest point so far this year. This follows year-over-year improvements of 3.2% in September and 3.7% in August.

“With demand growing softer and capacity becoming more available, we are now forecasting pricing to range from 1% to 3% in 2016," said the investment firm Avondale Partners, which provides analysis of the report.

It said despite a more tempered outlook on 2016, contract pricing is expected to continue increasing "after a drawn-out bid season last year."

When October is compared to the month before it showed no change, following a 1.9% gain in September from August.

The 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, providing a reflection of trends in baseline truckload prices.

Meantime, on the intermodal front, total shipping costs fell 3.2% year-over-year in October after a 2.3% drop in September, but managed a 3.9% improvement compared to September, which saw a 2.4% drop from the month before.

This put the Cass Intermodal Price Index at 129.9, its highest level in six months.

But the rebound is not expected to last.

Avondale Partners expects intermodal rates to continue their decline through the remainder of 2015 as the dramatic drop in oil prices negatively impacts U.S. domestic demand.

"We have historically observed a high degree of correlation between truckload and intermodal pricing, and know that should truckload rates continue to accelerate in the coming months, intermodal rates would normally follow," Avondale said. "That said, this is only true for the base rate, and the dramatic drop in fuel surcharges for truckers has to put pressure on domestic intermodal rates, especially in shorter lengths of haul."

The Cass Intermodal Price Index is an indicator of market fluctuations in per-mile U.S. domestic intermodal costs and includes all costs associated with the move, such as linehaul, fuel and accessorials

Both measures come from actual freight invoices paid on behalf of Cass Information Systems’ clients, which totaled over $26 billion in 2014.

Comments

  1. 1. Steve [ November 24, 2015 @ 05:54AM ]

    B.S. ! The rates are down over 20% from last year ! Who the hell writes this B.S. ?

 

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