Cass and Avondale report mixed truckload and intermodal rates for September

Truckload and intermodal pricing was flat annually, according to the September edition of the Truckload and Intermodal Cost Indexes from Cass Information Systems and Avondale Partners.

This pricing data is part of the Cass Truckload Linehaul Index and the Cass Intermodal Linehaul Index, which were both created in late 2011. The indices are based on actual freight invoices paid on behalf of Cass clients, which accounts for more than $20 billion annually and uses 2005 as its base month.

Cass and Avondale said the truckload index “isolates” the linehaul component of full truckload costs from other components such as fuel and accessorials, which in turn provides an accurate reflection of trends in baseline truckload prices.

September truckload rates were up 1.7 percent compared to September 2012 and up 2.7 percent compared to August.

The report explained that demand for truckload capacity continues to increase, with mid-single digit pricing growth in recent months and tight capacity intact.

The fact that capacity remains tight is not a huge surprise, given the myriad challenges motor carriers are facing, including: the economy; driver hiring, availability, training and retention; demand; and the increasing amount of regulations the industry faces, among others.

Even with slow economic growth, coupled with the federal government shutdown, capacity availability has been “tight but predictable due to the moderate recovery, but available pockets here and there make it more predictable in helping to find trucks,” said Jim Tucker, COO of Tucker Worldwide, a global freight brokerage services provider. 

The Cass and Avondale report stated that rates on the intermodal side were down 0.5 percent annually in September and fell 1.2 percent from August.

“Despite record volumes (partially due to mode shift from long-haul truckload), the pricing dynamic in intermodal remains very competitive,” the report’s authors wrote. “We expect linehaul rates to remain relatively flat in the near term, but do expect fluctuations in diesel to cause ‘all-in’ pricing to continue to be somewhat volatile.”

When the Truckload Line haul Index was first introduced in November 2011, Avondale Partners analyst Donald Broughton explained that the objective of this index was to deliver a more timely barometer of truckload pricing than the one provided by the American Trucking Associations (ATA), which does not fully “remove the effect of diesel in its revenue per mile series,” adding that the ATA’  revenue per mile series—on both a seasonally-adjusted or non-seasonally adjusted basis—tracks more closely with Cass’ Truckload Total Cost (per mile) Index, which is more sensitive to changes in diesel than with Cass’ Truckload Line haul (per mile) Index.

He added that whereas the ATA reports truckload pricing roughly 45 days after the end of the month, Cass data is ready to be analyzed three-to-five days after the end of the month.

“The fact that Cass processes $20 billion in freight bills annually is significant,” Broughton told LM in an interview. “The biggest concern initially when putting this together was protecting confidential information of Cass’ customers, as many of them compete directly with each other and do not want each other to have access to their respective freight spend. Once that was taken care of it is a matter of going through the data and delineating it to strip out accessorial and fuel-related charges.”