Intermodal rate slide hits 16th month in April

Rates fell another 3.4 percent for the month compared to April of last year, the 16th consecutive month prices have decreased, and analysts with Avondale Partners expect this trend to continue through the rest of 2016.    Intermodal rates fell another 3.4 percent in April 2016 compared to the same month last year, according to the latest Cass Intermodal Price Index, which measures all-in per-mile costs.
   Cass Information Systems Inc., a transportation intelligence analyst, said year-over-year rates were down for the 16th consecutive month. Intermodal rates dropped 3 percent year-over-year in March, 3.8 percent in February and 2.2 percent in January.
   The continued decline in rates is a record for the index, which was created in 2005. The previous record decline was set in the 13 months from Dec 2008 through Dec 2009.
   Investment firm Avondale Partners reiterated its expectations for further declines in intermodal rates for the remainder of 2016 as the dramatic drop in diesel and crude oil prices continues to take its toll on U.S. domestic demand.
   “We have historically observed a high degree of correlation between truckload and intermodal pricing, and know that should truckload rates accelerate in the coming months, intermodal rates would normally follow,” Avondale said. “That said, this is only true for the base rate, and the dramatic drop in fuel surcharges for truckers has to put pressure on domestic intermodal rates, especially in shorter lengths of haul.”