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Truckload rates continue to increase, Cass Index shows
The Cass Truckload Linehaul Index, a measure of changes in per-mile truckload linehaul rates, increased 1.9 percent in October from the same period last year, after growing 3.2 percent in September and 3.7 percent in August, according to analyst firm Avondale Partners, which collaborates with Cass Information Systems of St. Louis.
"With demand growing softer and capacity becoming more available, we are now forecasting pricing to range from [a]1percent to 3 percent [increase] in 2016," Avondale Partners stated. Despite a more tempered outlook on 2016, contract pricing is expected to continue increasing "after a drawn-out bid season last year."
Total intermodal costs fell 3.2 percent in October from October 2014 after a 2.3 percent drop in September from the same period last year. Avondale Partners expects intermodal rates to continue their decline through the remainder of 2015 as the dramatic drop in oil prices negatively impacts U.S. domestic demand.
"We have historically observed a high degree of correlation between truckload and intermodal pricing, and know that should truckload rates continue to accelerate in the coming months, intermodal rates would normally follow," Avondale explained. "That said, this is only true for the base rate and the dramatic drop in fuel surcharges for truckers has to put pressure on domestic intermodal rates, especially in shorter lengths of haul."
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