Despite a slight downturn from the month before newly released figures show in November the Cass Truckload Linehaul Index rose 6.7% year over year.
Squeezed capacity and steadily improving demand, spurred by strong industrial production and unprecedented levels of port congestion, continue to drive truckload linehaul costs up for the near term, according to the investment firm Avondale Partners, which provides analysis of the report.
“We would point out that contract pricing, which applies to more than 95% of the public carriers' freight, has been accelerating of late after a drawn out bid season,” said Avondale. “As a result, although spot market pricing has decelerated somewhat, it remains strong, [and] we are not surprised to see our index continue to post mid-to-high single digit gains and we expect this to continue through the fourth quarter of 2014.”
Avondale said it continues to expect contract truckload pricing to rise 4% to 6% in 2015, with the higher end looking “increasingly likely.”
The Cass Truckload Linehaul Index is indicator of market changes 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, the Cass Intermodal Price Index rose 3.1% year over year in November, while there was a slight drop from October’s costs.
“This year over year growth has slowed slightly from the 3.9% increase in October but still demonstrates a trend towards continued increases into 2015,” Avondale said.
With fuel and other costs factored into this index, Avondale pointed out that base rates are increasing “at a rate that surpasses the lag due to [decreasing] fuel pricing.” It projects rates to remain competitive but rising “as ever more long-haul carriers move into shorter lengths of haul and the truckload market continues to tighten.”
The Cass Intermodal Price Index is an indicator of market fluctuations in per-mile U.S. domestic intermodal costs that includes all costs associated with the move, such as linehaul, fuel and accessorials.
Data within both indexes are derived from actual freight invoices paid on behalf of Cass Information Systems’ clients, which totaled over $23 billion in 2013.