Intermodal rates continue to slide in March

Rates fell another 3 percent for the month compared to March of last year, the 15th 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 percent in March 2016 compared to 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 15th consecutive month. Intermodal rates dropped 3.8 percent year-over-year in February, 2.2 percent in January, and 3.8 percent in December 2015.
   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 prices and even more dramatic drop in oil takes its toll on US domestic demand.”
   Historically, there is a “high degree of correlation between truckload and intermodal pricing,” the firm said. As contract rates for trucking continue to lose strength and move into negative territory, “[this] would imply even more potential weakness for intermodal pricing.”