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TL linehaul costs up 1.5% in December

Superstorm Sandy, as well as the actual and potential port strikes, created higher-than-normal demand. Intermodal rates (not including fuel surcharge) were up 1.7 percent in December from the month before (versus flat, on average).

The Trucker News Services

1/15/2013

Truckload linehaul costs rose in December more than usual, likely due to the increased freight in the Northeast due to Superstorm Sandy and its aftermath, according to the Cass Truckload Linehual Index.

While linehaul costs on average increase .3 percent from November to December, in 2012 the increase was 1.5 percent. The increase in spot market rates of 5 percent was a big contributor. These numbers are consistent with the aftermath of Hurricane Katrina, when average truckload rates increased approximately 1 percent more than normal for the month of the storm and the following three months. Year-over-year, truckload linehaul rates were up 3.4 percent.     

As with truckload freight, unusual events in November and December led to increased intermodal costs both months. Superstorm Sandy, as well as the actual and potential port strikes, created higher-than-normal demand. Intermodal rates (not including fuel surcharge) were up 1.7 percent in December from the month before (versus flat, on average).

Hurricane Sandy caused a spike in inbound freight into the Northeast with limited outbound opportunities (much like truckload). And in its own monthly report, Avondale Partners provided this analysis of the port strike’s effect on intermodal:           

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“The eight-day clerical worker strike at the Port of LA in late November/early December likely resulted in catch-up volume throughout December, pushing up outbound rates from the West Coast. Many container lines applied 'congestion surcharges' to international shipments into and out of the east coast starting Dec. 1 as many shippers looked to bring in as much inventory as possible [to] push outbound shipments ahead of a potential ILA strike on Dec. 31. Although the strike has been averted for now with an extension signed through Feb. 6, we believe this could continue to distort what is already a somewhat artificially tight marketplace in the Northeast during January.”

Avondale added that “Given the current supply/demand dynamic, we believe intermodal rates will remain relatively flat.”

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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