Truckload Linehaul Rate Increases May Come to an End in 2019

April’s index value of 138.4 was a YoY increase of 2.7%

The Cass Truckload Linehaul Index, which measures changes in realized linehaul rates, continued the run of price increases in April that began in November 2017. Linehaul rates are now just shy of the all-time high established in December 2018. April’s index value of 138.4 was a YoY increase of 2.7%, and while it was impressive given the increasingly difficult comparisons, it also suggests that the weakness in spot pricing is beginning to have a material effect.

With spot rates >30% lower than contract rates and therefore applying negative pressure, analyst and commentator for the Cass Indexes, Donald Broughton, lowered his 2019 pricing forecast. “After starting the year with a 2% to 5% range, in March we lowered it to a 1% to 3% range, and are now predicting a range of -2% to 1%.”

Intermodal Costs Increase for 31st Consecutive Month

After setting yet another all-time high (151.9) in March, the April Cass Intermodal Price Index of 149.8 was slightly lower (-1.4%) sequentially, but still 5.6% higher on a YoY basis. This marked the thirty-first consecutive month of YoY increases. Tight truckload capacity and higher diesel prices were creating incremental demand and pricing power for domestic intermodal throughout much of 2018. However, with the severity of weakness in truckload spot pricing, this may be coming to an end. And with the price of diesel only 0.4% higher than a year ago, it has gone from being a slight negative to a neutral factor for intermodal demand and pricing.

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