Truckload linehaul rates showed further stability in May, according to newly released figures, while a separate report shows intermodal rates continue to expand.
The Cass Truckload Linehaul Index increased 1.1% in May from the month before to a reading of 122.7. This follows a 1.1% rise in April from March, marking the end of 13 consecutive months of pricing contraction.
“May’s pricing, while promising, declined 1.5% sequentially versus April 2017 and is flat versus May of 2015,” said Donald Broughton with Broughton Capital.
Broughton's pricing forecast remains between a 1% decline to 2% rise for the year, as the current strength being reported in spot rates leads him to believe contract pricing rates should move back into positive territory by the end of the year.
The Cass Truckload Linehaul Index measures market fluctuations in per-mile truckload pricing that isolates the linehaul component of full truckload costs from others, such as fuel and accessorials, providing a reflection of trends in baseline truckload prices.
Meantime, the Cass Intermodal Price Index showed the pace of growth in May slowed from April. The reading of 129.3 is 2.9% lower than the previous month while it marked the eighth consecutive month of year-over-year improvements.
May’s data suggest that pricing momentum is slowing as growth softened compared to the 3%-near 5% monthly growth observed earlier this year, according to Broughton, who expects intermodal rates to show better strength in 2017 than during 2016.
“The price of diesel fuel has recovered from oversold lows and established a price more consistent with the marginal cost of production from domestic fracked sources,” he said. “Simply put, the current level of demand and pricing will produce a positive year-over-year comparison for the next six to nine months.”
The Cass Intermodal Price Index measures market fluctuations in per-mile U.S. domestic intermodal costs. It includes all costs associated with the move, such as linehaul, fuel and accessorials.
Data within both measures comes from actual freight invoices paid on behalf of clients of freight-payment processor Cass Information Services.