Trucking and intermodal pricing for freight movements were mixed in May, 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, headed up 1.2% annually to 135.3 (January 2005=100), extending a stretch of gains going back to November 2017. While this number is solid, it is down from the all-time high set in December 2018 at 144.2, and, given the increasingly difficult annual comparisons, due to a very strong 2018, “it also suggest that that weakness in spot market pricing is having a material effect.”
In May, Cass and Broughton lowered its realized pricing forecast for 2019, following a 2%-5% range at the beginning of the year, and then lowering it to 1%-3% in March. That range is now down to -2% to 1% for various reasons, including:
On the intermodal side, total May intermodal pricing was up 4.2% annually, to 147.0, and down 1.9% compared to April. The annual gain was limited compared to previous annual gains of 5.6% in April, 6.1% in March, 6.2% in February, and 8.6% in January. March’s 151.9 reading is the all-time high.
Despite the annual gain, the report noted that weakness in truckload pricing and moderation in fuel pricing suggest the recent March peak will not be challenged in the coming months.
“This marked the [32nd] month of YOY increases, and brought the three-month moving average to 5.3%,” wrote Donald Broughton, founder of Broughton Capital, in the report. Tight truckload capacity and higher diesel prices were creating incremental demand and pricing power for domestic intermodal throughout much of 2018. However, with the severity of weakness in truckload spot pricing, this has finally come to an end.”