Truck Linehaul Index Up, Intermodal Price Index Continues to Decline

The Cass Truckload Linehaul Index increased only 0.4% YoY in January, a fifth consecutive month of waning truckload pricing strength.

According to analysts at Avondale Partners, softening demand and increasing capacity are posing downside risks to their previously forecasted 1% to 3% increases this year. Avondale also referenced other factors providing downward pricing pressure, including carrier bankruptcies at historic lows, truck counts up by single digits and the relaxation of the of the 34 hour restart rule.

At the same time, the Cass Intermodal Price Index fell another 2.2% YoY in January after declines of 3.8% in December and 2.4% in November.

“We expect intermodal rates will continue to decline in 2016 as the dramatic drop in diesel prices … takes its toll on U.S. domestic demand,” stated Avondale Partners. Consequently, “the ~$0.35 a mile decline in fuel surcharges collected by truckers in the last year and a half has to challenge demand and pricing power for domestic intermodal.”

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