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2/4/2015



Rail News: Rail Industry Trends

Cass truckload, intermodal indices increased in December


The Cass Truckload Linehaul Index in December rose 7.4 percent year over year as demand increased and capacity remained tight.

Contract rate increases are projected to continue driving up the index, which measures truckload linehaul rates during a given month.

"We would point out that contract pricing has been accelerating after a drawn-out bid season. As a result, although spot market pricing has decelerated somewhat, we are not surprised to see our index continue to post mid-to-high single-digit gains, and we expect this to continue in the first quarter," said Avondale Partners officials in a press release. "We are raising our contract truckload pricing prediction to an increase of 4 percent to 9 percent in 2015, depending on how much of a rate increase each carrier was successful in obtaining in 2014 and when those rate increases were achieved."

Meanwhile, the Cass Intermodal Index rose 1.5 percent in December. Intermodal rates are expected to decline this year as the dramatic drop in diesel prices — and the even more dramatic drop in oil prices — leads shippers to shift their intermodal loads back to truckload, Avondale Partners said.

"We concede that the extent to which loads can be shifted from domestic intermodal back to over-the-road truck is dependent on trucking capacity, but [a] decline in fuel surcharges collected by truckers in the last six months has to challenge demand and pricing power for domestic intermodal," they said.



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