Separate measures of truckload linehaul and intermodal rates moved higher in September, according to newly released reports, as the U.S. battered hurricanes and higher fuel prices.
September’s Cass Truckload Linehaul Index improved by 4.2% year-over-year to a reading of 128.2, a new all-time high for the index. When the level is compared to August, it posted a 2.9% gain,
According to Donald Broughton, transportation analyst and founder of Broughton Capital, pricing for trucking is continuing to grow ever stronger and gaining momentum.
After showing year-over-year negatives for 13 months in a row, the index has not only been positive now for six months, but the strength is accelerating.
In just the last 90 days, Broughton's independent pricing forecast has improved for 2017, from a range of between a 1% decline to 2% increase, to his current 2% to 4% gain, as the current strength being reported in spot rates is leading him to believe contract pricing rates should keep rates in positive territory through the end of the year.
Last month he was forecasting rates to improve 1% to 3% this 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 rose 4% year-over-year to a level 129.1 in September, driven by the hurricane refining crunch which has pushed diesel prices up by 12% to 14% in the last two months.
The measure improved 1.6% in September from the month before, the third month-over-month increase.
September also marked the twelfth consecutive month of year-over-year increases, and pricing momentum appears to finally be accelerating.
The absolute nominal value of the index established its most recent peak in March at 135.4, as diesel flirted with $2.60 a gallon, and then sequentially trended lower since, as diesel fell back toward $2.50 a gallon in July. Broughton now expects it to exceed March’s peak by the end of the year.
Longer term, he continues to foresee oil trading in the $45 to $55 range and diesel in the $2.25 to $2.75 range throughout 2017, minus the refining interruption pressure produced by the recent hurricanes.
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.