Growth in truckload rates continues to accelerate

Year-over-year domestic rates in June moved up 9.5 percent, a third consecutive record increase.    Growth in domestic U.S. truckload rates continued to accelerate in June, with pricing jumping another 9.5 percent compared with the same month a year ago, according to the latest Cass Truckload Linehaul Index.
   Following then-record-setting increases of 8.2 percent in April and 9 percent in May, the June growth to a reading of 134.7 represents the 15th consecutive month of year-over-year gains and the largest percentage increase since 2005, the base year for the index.
   The index had fallen for 13 straight months — from March 2016 through March 2017 — prior to the recent growth, but with capacity continuing to tighten as demand rises, carrier pricing power looks set to continue accelerating as the year goes on.
   Donald Broughton, an economist that analyzes the TL index and the North American freight transportation industry at large for Cass, said that as a result of the acceleration in rate growth, the firm is increasing its realized contract pricing forecast for 2018 from between 6 percent and 8 percent to between 6 percent and 12 percent, adding that “current data is clearly signaling that the risk to our estimate may be to the upside.”
   “We believe that this is the strongest normalized percentage level of truckload pricing achieved since deregulation (normalized meaning except for extreme periods of recovery from recession),” he said.