Truckload Linehaul Rates Rise 4.8% Year Over Year

Intermodal Costs Reach Another All-Time High

The Cass Truckload Linehaul Index in March continued the run of increases that began in November 2017. Truckload linehaul rates paid (a mixture of contract and spot) were 4.8% higher than last March, with a two-year stacked increase of 12.0%. The index value was 139.9. The base month for the Index is January 2005.

“We expect continued increases in coming months, but at slightly lower percentage increases, as comparisons grow increasingly tough in coming months,” said Donald Broughton, analyst and commentator for the Cass Indexes. “We are lowering our realized pricing forecast for 2019 (from 2% to 5%) to 1% to 3%.” He cited that spot rates, after peaking above contract rates briefly in 2018, are below contract rates by a margin that is likely unsustainable. But even when/if they increase, they should continue to put negative pressure on both contract rates and realized pricing.

Intermodal Costs Reach Another All-Time High

The recent rally in diesel prices put enough pressure on rates and demand to push intermodal pricing to yet another all-time high in March. The March Cass Intermodal Index, at 151.9, increased 3.8% sequentially and was 6.1% higher on a year-over-year basis. This marked the thirtieth consecutive month of year-over-year increases. Throughout much of 2018, tight truckload capacity and higher diesel prices created incremental demand and pricing power for domestic intermodal. With the recent rise in WTI crude from as low as $42 a barrel in late December of last year to just over $64 a barrel, we are expecting the price of fuel’s influence on the demand and pricing power for intermodal services to continue to increase in coming months.

Total pricing (all-in costs) for intermodal carriers jumped 6.1% in March (over the previous year), after increasing 6.2% in February, 6.8% in January, 8.6% in December, 10.6% in November, 10.9% in October, 10.1% in September, 11.4% in August.

Category: Featured, General Update, News