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Truckload linehaul rates see biggest decline since financial crisis

Chance of year-over-year growth in volumes or price during the second quarter 'ends' according to Cass

Image: Jim Allen/FreightWaves

Year-over-year declines in the Cass Freight Index accelerated in March, with the shipments index declining 9.2% and the expenditures index dropping 8.2% for the month.

“This ends any chance of 2Q20 seeing y/y growth in domestic U.S. shipments and freight costs,” the report’s author and Stifel Financial (NYSE: SF) equity research analyst David Ross lamented. “This has quickly gone from a China production concern to a U.S. (and global) consumer spending problem. No business, no jobs, and no income for many leads to much less freight moving around.”

Even though COVID-19-related lockdowns led to approximately a month of truckload volume improvement on a year-over-year basis as evidenced by FreightWaves’ Outbound Tender Volume Index, the strength was largely concentrated in e-commerce and home deliveries of groceries and household supplies. The index has reversed course, with 2020 volumes retreating well below 2019 levels.

Outbound Tender Volume Index (USA) – SONAR: OTVI.USA

“There has been a clear divide between winners and losers of these shut-in orders, with demand for groceries, home improvement, e-commerce and consumer staples increasing, while restaurant, auto and (mall) retail falling to practically zero volume,” Ross stated.

March nonfarm payrolls shrank by 701,000, with the unemployment rate climbing to 4.4%, a likely sign of what is to come as the survey period extended only through the 12th of the month before most lockdowns went into place. The sudden closure of the economy led to 6.6 million new unemployment claims in the recent week with more than 16 million filing for benefits in a three-week period.

The expectation of further erosion in freight fundamentals is the consensus; how much so remains the question.

“April will undoubtedly be worse and likely the worst month in a long time,” Ross said.

Ross expects shipment volumes to trough in April with “a rebound in weekly volumes later in 2Q20 to signal a climb back toward more normal economic activity.” He noted that they’re keeping an eye out for carriers exiting the market and “a potential restocking event” as catalysts that could drive rates higher later in the year.

The Cass TL Linehaul Index, which measures per-mile linehaul rates excluding fuel and accessorials, fell at a rate not seen since the global financial crisis. The 6.6% year-over-year decline was the largest for the index since June 2009, similar to the declines seen in the first two months of 2020.

Rates for carriers with exposure to consumer-packaged goods or e-commerce have held up better than those carriers that are more business-to-business or industrial-oriented. Even with a spot market rate bump on the recent volume surge, the linehaul index remains weak. Ross noted that the first-quarter weakness in the index, which has a “strong correlation” with pricing metrics provided by the publicly traded truckload (TL) carriers, bodes poorly for first-quarter 2020 earnings results.

DAT Longhaul Van Freight Rate – SONAR: DATVF.VNU

“This broad pricing pressure should last a little longer, but then when the economy reopens (and it will), we’ll see how many truckers are left and how much freight needs to be moved,” Ross added.

Total per-mile intermodal costs as captured by the Cass Intermodal Price Index eroded 4.4% year-over-year in March. Rail intermodal traffic is off more than 9% year-over-year so far in 2020, according to the Association of American Railroads. As long as TL pricing remains pressured, so will intermodal rates.

“We hope the Cass Indexes bottom in April, and the quicker businesses can reopen, the better readings we should see in May and June,” Ross concluded.

Cass processes more than $28 billion in freight payables on behalf of its clients annually.


  1. Stephen Webster

    Many small trucking companies hauling certain kinds of freight are in trouble. The government should pay up to $10,000 per month towards the insurance for any trucking companies who’s income is down over 30 percent for the month of March April and May. Some provincial government in Canada run government insurance. The other provincial governments should do the same companies with less than 10 company trucks with a total size of 20 trucks or less including owner ops. All new truck drivers , truck driver schools , taxis wheelchair minivans and wheelchair busses need government insurance( with between 30 and 50 percent of the premiums paid by the government up to $25,000 per company or nonprofit per year) as private insurance companies in Ontario Canada are not doing a good job. A person I know who had been a truck owner who got hurt in a house fire in 2017 and was unable to drive died last month on the street of Toronto. The insurance company had the court case against them stayed after he died meaning that his estate can not get paid or the wartime home repaired.

  2. tillman

    You are absolutely right !
    unless something is done we all ( Small companies with 2-5 trucks ) are going to be out of business !
    Broker do nothing to send a dam piece of paer with a booking number or pickup number, No Truck note, No Insurance , No Fuel , no Nothing other than a dam computer and light bill !, and h3/4 of them work out of their house.!
    Somebody, Whether its the Government or the dam Lobbyist or whoever , needs to do something about this !

  3. Leon

    Trucking companies are going out of business have anyone seen or heard if any brokerage companies have shut down in the past few years they are steady opening brokerage companies and the people who out here with the equipment and all of the maintenance and over priced insurance get ran out of business who speaks for the small trucking companies they was quick to tackle HOS issue but nobody talks how brokers just straight out Robs the truckers,broker shouldn’t get no more than 10-15% of any load now they get 30 -40% this has to stop someone please help us the government we need help…..

    1. Rick

      I totally agree the brokers are taking our money paying the lowest rates ever. When the companies are paying the same amount to ship the freight it’s absolutely ridiculous. I have three brother-in-law‘s they’re huge sales reps and they’re telling me their freight cost have not gone down but yet our income or rate of freight is so low it’s barely breakeven for me. I have stopped my truck and I think All trucks should shut down so they can truly feel the impact. I was just reading where freight was good for about a week and a half due to the pandemic and Then freight fell off the cliff but yeah go to a supermarket and the shelves are still bear makes zero sense.

  4. Noble1

    For you chart reading enthusiasts(analysts) who are well read in sophisticated chart reading “principles” , there is one particular chart I would like to bring to your attention on COVID-19 total cases in a province in Canada . Prince Edward Island . It jumped out to me very clearly .

    They appear to have only 25 cases up to date . If you go to Canada DOT ca on Coronavirus disease (COVID-19): Outbreak update , you’ll arrive at a page where you can hover across the country’s map with your mouse .

    Once you arrive over Price Edward Island’s COVID-19 Cases chart , look at that crystal clear pattern !

    Now isn’t that interesting ?

    1. Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & PROSPER ! IMHO

      I don’t agree that the majority should suffer due to the minority’s ill behavior .

      In my humble opinion ………….

      1. The Colonel

        I own an interest in 228 tractors that we provide power and drivers to 17 contracted corporations. 9 of these corporation have been clients for 20+ years, 5 for over 10 and the last 3 for 3.2 years average.
        This is one of the most interesting investments I’ve made in my fifty years of what my CPA calls “satisfying an old obsession with trucks, while showing an average 7.7% annual ROI”.
        Today we 5 shareholders met via SKYPE to agree to grant concessions to all 19 of our clients should they require help. However, most are paying bonuses which we pass along 100% to our Drivers.
        Why? Because we “play fair and truly feel these corporations are our ‘partners’. Our Drivers as well.” The 23% of Drivers not working due to their lessor’s businesses will receive weekly pay of 70% of the Average of their past 90 days weekly earnings. For the foreseeable future of the economic shutdown.
        Should this Pandemic and it’s economic calamity last long enough, money will be worthless anyway. Doing the right thing is a decent, honorable way to treat the people who’ve made our lives better; we’ve decided that long ago but put it in action today.
        Our plan can’t, will not, work for everyone. We’re just fortunate I guess.

        1. Noble1


          “Should this Pandemic and it’s economic calamity last long enough, money will be worthless anyway. ”

          During it no . Currently we are in a “deflationary” period . During a deflationary period cash is king . In the “aftermath” within an inflationary period , yes fiat currency value decreases and considered to be worth-less . In order for its value to be “worthless” we would need to experience a “hyperinflation” period .

          In my humble opinion ………

      2. JOSE Infante

        Yes we should…without trucks America stops and the current rates are going to take owner ops to bankruptcy. Lets UNITED OWNER OPS WE NEED TO BE HEARD AND HARD TIMES PUSH US ALL TO STOP AND BE HEARD !!

        1. Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & YOU'LL PROSPER ! IMHO

          Not only the O/O’s . You need “truck drivers to unite” .

          Once “truck drivers unite” and organize their “Alliance” intelligently ,they monopolize the industry . The key is to act “ethically” with the “monopoly” . Then you become a force to be reckoned with . No more competition among truck drivers , all for one and one for all . No more cut throats and or pick pockets . NO MORE MIDDLEMEN ! That’s what “uniting, conquering , and prospering” ethically is all about from my perspective .

          It’s one heck of an innovative plan .

          In my humble opinion ………

Comments are closed.

Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.