Newly released figures show the market for truckload freight shipments is improving and the intermodal sector has completed nearly a year of increasing rates while the outlook for both has improved.
After being negative for 13 months in a row, the Cass Truckload Linehaul Index has not only been positive now for five straight months, but it is also increasing in magnitude, according to Analyst Donald Broughton with Broughton Capital.
The August index improved by 2.6% from the same time a year ago to a reading of 124.6. While this is 0.6% below the reading from the month before, there is a belief it will get better.
In just the last 60 days, Broughton's pricing forecast has improved for 2017, from a range of a 1% decline to 2% improvement, to a newly expected 1% to 3% increase. That’s because the current strength being reported in spot rates is leading him to believe contract pricing rates should keep truckload rates in positive territory through 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.
Intermodal Pricing Measure Posts Another Year-Over-Year Gain
Meantime, the Cass Intermodal Price Index rose 1.3% in August from the same time a year ago to 127.1, which was a slight improvement from July’s anemic 0.6% increase and is at its highest level since May.
This marked the 11th consecutive month of year-over year increases; however, pricing momentum continues to be relatively muted, according to Broughton.
The absolute nominal value of the index established its most recent peak in March at 135.4, as the national average cost of diesel fuel flirted with $2.60 a gallon, and has sequentially trended lower since, as diesel has fallen back toward $2.50 a gallon.
As the price of oil has recovered from the oversold lows of February 2016 and established a price more consistent with the marginal cost of domestic production, Broughton expects intermodal rates to show better strength through the remainder of 2017 than was achieved in 2016.
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, which totals nearly $21 billion annually.