Truckload Linehaul Index Speeds Up, 10% YoY Gain: Inflation Ahead?

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 16 months in a row, but the strength is continuing to accelerate.

“Last month we increased our realized contract pricing forecast for 2018 from a range of 6% to 8% to a range of 6% to 12%, and current data is clearly signaling that the risk to our estimate may still 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).”

Cass Intermodal Price Index

The latest data point shows total intermodal pricing (all-in intermodal costs) rose 12.0% YoY in July to 139.2, the largest YoY increase since July 2011.  July marked the 22nd consecutive month of increases, and brings the three-month moving average up to 10.6% YoY.  “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, and even higher in certain regions within the U.S.”