Measures of truckload line haul rates and intermodal rates showed continued increases in January, according to newly released figures from one freight payment processor.
The Cass Truckload Linehaul Index continued the acceleration established in November and December, when it moved up 6.3% and 6.2% respectively, by posting a 6.5% year-over-year gain last month. This latest reading of 133.5 is just shy of December’s 134.5 all-time high.
After signaling an industrial recession in the U.S. and being negative for 13 months in a row (from March 2016 through March 2017), the index has not only been positive now for ten months in a row, but the strength is continuing, according to Donald Broughton, analyst and commentator for the Cass Indexes.
"In just the last seven months, our pricing forecast has increased from -1% to 2%, to 6% to 8%, and now giving us reason to believe the risk to our estimate continues to be to the upside," he said. "The current strength being reported in spot rates tells us contract pricing rates should keep rates in positive territory well into 2018."
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 total intermodal pricing rose 5% in January, with the measure at a record high of 141.4 plus a three-month moving average increase of 4.3%.
January marked the 16th consecutive month of increases, and pricing momentum continues to strengthen, according to Broughton, as higher diesel prices are creating demand and pricing power for domestic intermodal.
"Longer term, 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 throughout 2018,” he said, provided there are not refining interruptions or other catastrophic events.
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.