Truckload and intermodal pricing see gains in June, notes Cass and Broughton

Truckload and intermodal pricing for freight movements were up to varying degrees in June, 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 pricing, which measure linehaul rates, increased 0.9% annually, to 135.9, in June, following a 0.4% May increase. This extends a stretch of rate gains that commenced in November 2017, but it is down 5.85 compared to the December 2018 all-time high reading of 144.2.

The report said that June’s 0.9% gain was notable, in that it was up against difficult annual comparisons, but it added that it also suggests “the weakness in spot pricing is having an increasingly negative effect,” adding that “even more alarming, the trajectory on a nominal basis strongly suggests that the TL index will go negative next month and stay negative through the end of the year.” 

Three reasons were identified for the lower pricing outlook, including:

• the Cass TL Linehaul Index for 2018 was up 8.4% annually;
• fuel made TL pricing measure from some other data sources in the marketplace appear higher than Cass last year and are set to appear lower than Cass this year; and
• after peaking above contract rates briefly in 2018, spot rates are below contract rates by larger margin than Cass and Broughton believe is sustainable and are putting significant negative pressure on both contract rates and realized pricing

On the intermodal side, the report said that total pricing for intermodal carriers was up 3.9% in June, to 142.0, following gains of 4.2% in May, 5.6% in April, 6.1% in March, 6.2% in February, and 6.8% in January. June’s gain marks the 33rd consecutive month of annual gains.

March’s 151.9 was an all-time high reading for intermodal, but it has seen sequential declines since then through June. And the report said that even though June was up 3.9% annually, weakness in TL pricing and moderation in fuel pricing suggest that the recent March peak will not be challenged in the coming months. What’s more, it added that it expects annual results for the intermodal index to go negative in November, with the possibility that could happen as soon as August or September.