Truckload Linehaul Index Up Modestly in February, Intermodal Drops

The Cass Truckload Linehaul Index increased only 0.5% year over year in February after a comparably modest rise of 0.4% in January. 

Analysts at Avondale Partners have adjusted their pricing forecasts downward to a range between -1% and 2% for the remainder of 2016, stating that demand continues to soften while truckload capacity has been further increasing.

Avondale also reiterated that contract pricing, which represents more than 95% of publically-held carriers’ business, has experienced increases due to a drawn-out bid season last year; however, spot market pricing—which has historically led contract pricing—has fallen well into negative territory.

The Cass Intermodal Index dropped another 3.8% year over year in February, representing 14 consecutive months of year over year declines. Avondale Partners reiterated that intermodal rates are expected to continue declining for the remainder of 2016 “as the dramatic drop in diesel prices … takes its toll on U.S. domestic demand.”

Although analysts at Avondale predict domestic container growth in the single digits in 2016, they “believe that is dependent upon demand in longer lengths of haul growing fast enough to offset the loss of volume in shorter lengths of haul, particularly in the East.”

Category: Featured