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Home » Intermodal rates hit seven-year high in June
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Intermodal rates hit seven-year high in June

July 13, 2012
Mark B. Solomon
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Rail intermodal base rates hit seven-year highs in June, propelled by demand from shippers looking for alternatives to get their freight moved in a tightening market for truckload capacity and from motor carriers seeking a more efficient way to get their customers' goods to market, according to an index released today by one of the nation's leading freight bill audit and payment firms.

However, intermodal pricing could fall in the next few months as a decline in diesel fuel prices prompts some shippers to switch back to truckload service for shorter lengths of haul, according to Cass Information Systems Inc., which audits and pays $17 billion a year in freight invoices on behalf of its customers. Cass publishes the report in conjunction with investment firm Avondale Partners LLC.

In addition, intermodal increases could be held in check for a period of time by an increase in container equipment capacity and by aggressive pricing from carriers looking to gain market share in the intermodal segment, according to the index's authors.

Per-mile base pricing for intermodal transport—which excludes fuel surcharges and other so-called accessorial fees—hit 100.8 percent in June, a 0.6-percent increase from June 2011 levels and the highest levels since 2005, according to the index.

Cass's truckload linehaul index showed rates rising 4 percent year over year, but staying flat through 2012 in part due to the shift to intermodal transport. As with the intermodal index, the truckload index excludes fuel surcharges and accessorial fees.

Avondale had last month projected a 6- to 9-percent increase in truckload rates later this year as demand was expected to increase while capacity continued to shrink. However, the firm said in a statement accompanying the index that it has "begun to temper our expectations for price increases in the second half" due to the economic slowdown in the United States and abroad.

Transportation Trucking Rail Intermodal
KEYWORDS Avondale Partners Cass Information Systems
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Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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