Pricing for Trucking Shows Stability

| June 20, 2017

Intermodal

According to Donald Broughton with Broughton Capital, pricing for trucking is showing further stability.

May’s Cass Truckload Linehaul Index increased 1.1% YoY to 122.7, a continuation of last month’s YoY pricing growth (recall that April’s +1.3% YoY marked 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. Broughton’s pricing forecast remains -1% to +2%, 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.

Intermodal pricing continues to expand, but pace of growth slows.

May’s Cass Intermodal Price Index increased 2.2% YoY to 129.3 in an eighth consecutive month of expansion, but the month’s data suggest that pricing momentum is slowing as growth softened compared to the 3-5% growth observed earlier this year.

That said, Broughton does expect intermodal rates to show better strength in 2017 than was achieved in 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. Simply put, the current level of demand and pricing will produce a positive YoY comparison for the next 6 to 9 months.

Category: General Update, Management

Comments are closed.