Pricing for trucking is growing stronger, according to Donald Broughton of Broughton Capital, which partners with Cass Information Systems Inc. to produce the monthly Cass Transportation Indexes.
Broughton’s statement accompanied the release of the Cass Truckload Linehaul Index and the Cass Intermodal Price Index for August.
Following a string of 13 consecutive negative months, August not only marks the fifth consecutive month the Cass Truckload Linehaul Index, has been positive, but it is also increasing in magnitude.
The August linehaul index improved by 2.6 percent year over year, to 124.6. In just the last 60 days, Broughton's pricing forecast has improved for 2017, from a range of -1 percent to 2 percent, to 1to 3 percent, as the current strength being reported in spot rates is leading him to believe contract pricing rates should keep truckload rates in positive territory through the end of the year.
Meanwhile, the Cass Intermodal Price Index rose 1.3 percent year over year to 127.1 in August, a slight improvement from July’s weak 0.6 percent increase. Although this was the eleventh consecutive month to show pricing increases, pricing momentum continues to be relatively muted. The absolute nominal value of the index established its most recent peak in March at 135.4, as diesel flirted with $2.60 a gallon, and has sequentially trended lower, as diesel has fallen back toward $2.50 a gallon.
As the price of oil has recovered from the oversold lows of February 2016 and established a price more consistent with the marginal cost of domestic production, Broughton expects intermodal rates to show better strength through the remainder of 2017 than was achieved in 2016.