A measure of truckload linehaul rates has hit a new record high while a separate gauge of intermodal shipping rates showed it posted its 15th straight increase.
December’s Cass Truckload Linehaul continued the acceleration that began in November by posting a 6.2% year-over-year increase and hitting an all-time high of 134.5. The measure improved 2.5% last month compared to the November reading.
After being negative relative to the previous year for 13 months in a row this gauge has not only been positive now for nine months in a row, but pricing continues to increase.
According to Analyst Donald Broughton, in just the last six months, his pricing forecast has improved from between a 1% decline and a 2% increase for this year to 6% to 8% hike.
"The current strength being reported in spot rates is leading us to believe contract pricing rates should keep year-over-year rate comparisons in positive territory well into 2018,” he said.
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 posted a 4% year-over-year gain in December hitting a level of 134.3.
The measure, which moved 2.8% higher in December compared to the month before, turned in its highest reading since last March.
According to Broughton pricing momentum appears to be increasing. Higher diesel prices are creating demand and pricing power for domestic intermodal.
"Throughout 2018, we continue to foresee oil trading in the $45 to $65 [per barrel] range and diesel in the $2.50 to $3.25 [per gallon] range,” he said.
Broughton noted this price forecast is predicated on there being no catastrophic events, including hurricanes, which can push crude prices, and subsequently fuel prices higher.
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 come from actual freight invoices paid on behalf of clients of freight-payment processor Cass Information Services.