Truckload Linehaul Index Up 9% in May

May’s Cass Truckload Linehaul Index continued the increasing rate of acceleration that began in 2017 by posting an 9.0% YoY increase to 133.7, the largest YoY percentage increase in this index to date (the base year is 2005).

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 Cass TL Linehaul Index has not only been positive now for 14 months in a row, but the strength is continuing to accelerate.

“Our realized contract pricing forecast for 2018 is 6% to 8%, and current data is clearly signaling that the risk to our estimate may be to the upside,” stated Donald Broughton, analyst and commentator for the Cass indexes. “We believe that this is the strongest normalized percentage level of truckload pricing achieved since deregulation (normalized meaning except for extreme periods of recovery from recession).”

The latest data point shows total intermodal pricing (all-in intermodal costs) rose an outstanding 9.1% YoY in May. The index rose to 141.1 just shy of the all-time high of 143.2 established in March. May marked the twentieth consecutive month of increases, and brings the three-month moving average up to 7.1%.

“Tight truckload capacity and higher diesel prices are creating incremental demand and pricing power for domestic intermodal,” stated Donald Broughton, analyst and commentator for the Cass indexes. “Longer term, we continue to foresee oil trading in the $45 to $65 range and diesel in the $2.50 to $3.25 range throughout 2018 (without any refining interruption pressure produced by hurricanes or other catastrophic events).”

 

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