Intermodal rates drop again in June

Year-over-year rates were down for the sixth consecutive month in June, according to the latest Cass Intermodal Price Index.    Intermodal rates fell 2.8 percent in June 2015 compared to June 2014, according to the latest Cass Intermodal Price Index.
   The transportation intelligence analyst said year-over-year rates were down for the sixth consecutive month. Intermodal rates dropped 3.1 percent in May, 1.9 percent in April and 1.6 percent in March compared with the previous year.
   “As lower fuel surcharges continue to affect the cost of truckload shipping (note: our truckload index does not take fuel into account), many loads are shifting from intermodal to truckload,” Cass Information Systems Inc. said in a statement. “That said, however, intermodal rates seem to mirror changes in fuel and remain competitive. Additionally, efforts to shift modes continue to be challenged by limited capacity.”
   “We expect intermodal rates will continue to decline in 2015 as the dramatic drop in diesel prices and even more dramatic drop in oil takes its toll on US domestic demand,” investment firm Avondale Partners said in its monthly investor report. “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 the ~$0.20 a mile decline in fuel surcharges collected by truckers in the last year has to challenge demand and pricing power for domestic intermodal, especially in shorter lengths of haul.”