Truckload linehaul rates fell again in July from the same time a year ago, marking the fifth straight month of year-over-year declines, according to latest readings from the Cass Truckload Linehaul Index.
The drop of 1.6% puts the measure at 122.5, but that is up 1.1% from June and is at its highest level since April.
Analysts at the investment firm Avondale Partners predict that pricing will remain down as much as 3% year-over-year for the remainder of 2016.
“Several factors continue to contribute to increased capacity, including driver pay increases; newer, more reliable trucks; overall fleet growth and an easing of the 34-hour restart rule,” the report said.
The index is an indicator of market fluctuations in per-mile truckload pricing, isolating the linehaul component of full truckload costs from other components, such as fuel and accessorials, providing a look at trends in baseline truckload prices.
Meantime, intermodal pricing fell 2.4% year-over-year in July, representing 19 straight months of declines.
Despite the drop in the Cass Intermodal Price Index the reading of 123.5 is 2% better when July is compared to June, following three straight month-over-month falloffs.
Historically, there is a "high degree of correlation between truckload and intermodal pricing," according to analysts with Avondale Partners. As contract rates for trucking continue to lose strength and move further into negative territory, “[this] would imply even more potential weakness for intermodal pricing," the report said.
The intermodal 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 the intermodal and the linehaul indices are based on costs as of January 2005 and use a base value of 100. Data is derived from actual freight invoices paid on behalf of freight payment processor Cass Information System and its clients, which totaled $25 billion in 2015.
The reports follow the release of the Cass Freight Index, which measures freight activity across all domestic modes, showing during July overall shipment volumes and pricing were persistently weak, with increased levels of volatility as all levels of the supply chain continue to try to work down inventory levels.