CASS Truckload Linehaul Index

Truckload linehaul rates paid in January increased 2.9 percent year over year, resulting in the largest year-over-year increase in linehaul rates since last February, according to the Cass Truckload Linehaul Index, which measures market fluctuations in per-mile truckload pricing.

Recent spot market data, combined with increasing demand and a high number of trucking companies exiting the market, all seem to indicate that rates – both contracted and in the spot market – will continue to rise, the report says.

“We believe that persistent cost pressures, relatively tepid demand, soft pricing, increasing regulatory pressure, and a less robust used truck market have taken their toll on smaller carriers over the last two years,” says Donald Broughton in his January analyst report. As a result, the number of trucking companies that went out of business in 2013 exceeded that of the prior two years combined.

Additionally, total tonnage and average weight per load are both rising. In the fourth quarter of 2013, tonnage was up almost 10 percent over 2012.

However, the Cass Freight Index, a broader measure of freight trends, shows that North American shipment volumes and freight expenditures both continued the decline that began in December after the economy abruptly reversed direction near the end of last year.

“Although GDP figures for the second half of 2013 indicate that the economy is strengthening, this has not yet translated to the transportation sector,” the report says.

 

The number of shipments dropped 3.6 percent from December 2013, and was 2 percent lower than a year ago, according to the index, which also notes a seasonal “drop-off” can be expected. Still, January shipment levels are at the lowest level since 2010, with weather a factor.

Freight spending in January dropped 5.1 percent, according to Cass. The report attributes much of the decrease to decline in the number of shipments. Compared to this time last year, freight expenditures are up 1.4 percent.

“Movements in our freight expenditures index have been stronger than those for shipment volumes, indicating that there has been very modest growth in rates,” the report says. “The trucking sector is still unable to push rates up significantly, while the railroads have made more headway.”

Spot market surges. Spot market freight availability on the DAT North American Freight Index rose 24 percent in January, exceeding December levels for only the second time since index began in 1996.

More freight flowed into the spot market in both December and January as shippers and their contracted carriers struggled to meet capacity challenges caused by extreme weather, the report notes.
Year-over-year freight volumes were up 45 percent to a level not seen since October 2005, when pent-up demand in the wake of Hurricane Katrina drove volume to an all-time high.

Van freight increased 52 percent; reefer loads added 83 percent, and flatbed freight nearly doubled, with a 93 percent increase, compared to January 2013.

 

Load availability in January rose 21 percent for both vans and reefers, while flatbed loads increased 33 percent, compared to the prior month, according to DAT.

Rates in the spot market also remained unusually high in January, despite a slight decline from December, the report adds. Average rates dipped 1.4 percent for vans, 0.6 percent for reefers and 5.5 percent for flatbeds. Compared to January 2013, rates rose 16 percent for vans, 4.7 percent for reefers, and 4.0 percent for flatbeds.