Pricing for both truckload and intermodal freight movements was largely solid in February, according to data in the most recent editions of the Truckload Linehaul Index and Intermodal Index from Cass Information Systems and Broughton Capital.
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 $23 billion annually and uses 2005 as its base month.
Truckload rates, which measure linehaul rates, saw a 5% increase to 138.4 (January 2005=100), rising for the 17th consecutive month, and coming in slightly shy of the December 2018 all-time record. The report said that the two-year stacked increase comes out to 11.9%.
“We expect continued rising costs in coming months, but at slightly lower percentage increases,” said Donald Broughton, founder of Broughton Capital and the report’s author.
Addressing spot rates, the report explained that after briefly peaking slightly above contract rates last year, spot rates are now below contract rates at what it called a more “normalized margin.”
On the intermodal side, the February Cass Intermodal Price Index was down 3% compared to January and up 6.2% annually, marking the 29th consecutive month of annual gains.
The report observed that with the recent rise in WTI crude from as low as $42 a barrel in late December of last year to just over $58 now, the expectation of increasing diesel prices to drive both incremental demand and incremental price increases for domestic intermodal could be in the cards.
And it also noted that there is “an extraordinary degree of correlation between truckload and base intermodal pricing, as intermodal uses the price of the over-the-road competing service as an ‘umbrella’ under which it can raise prices and still retain or gain volume.”