Intermodal Spot Rate Pricing Trendline Analysis
Weekly discussion and analysis on the trends in the intermodal spot rate market.
The InTek intermodal spot rate index increased 4.6% from the prior week.
For the week of Aug 4, 2020, domestic intermodal spot rate index:
- Up 4.6% from prior week.
- Up 35.9% from 90 days ago.
- Up 21.2% from prior year.
Lane Stats: 37.9% increased, 15.5% decreased and 46.6% went unchanged.
Intermodal spot rates continued to press higher this week and the driving reason is the capacity shortage coming from all California outbound intermodal lanes. Both the UNP and JBH have called out California as a constrained market for their contract customers. The constrained designation means that every intermodal box shipped out of California that is above an IMC's average daily rate, plus the surge allowance, will be slapped with a minimum of a $500 constrained market surcharge.
The driving factor of the West Coast capacity shortage is higher than expected ecommerce shipments, combined with a surge of inventory coming into the US for the "typical" inventory build that occurs at this time of year and the re-opening of the economy inventory demands. The key to watch over the next month is whether the inventory build goes beyond market demand, as this will cause a sudden drop in capacity needs with businesses readjusting to customer demands while they try to figure out how to operate optimally in a post and current pandemic crisis.
Intermodal volumes continue to improve their position this week with YTD 2020 volume reported down 8.7% from prior YTD.
Breaking the volume down by equipment, TOFC is down 15.4% and COFC is down 8.2%.
By region, volume is down 9.1% in the US, down 6.8% in Canada and down 9.4% in Mexico.
Comparison of Truckload to Intermodal Spot Rate
The national truckload spot rate increased 4.1% last week, as reported by the DAT Trendline Report.
The spread in the year-over-year national truckload average rate per mile and intermodal spot rates is in favor of truckload. Truckload year-over-year spot rates are up 10.6% (on a mileage basis), while domestic 53' intermodal is up 21.2% (on a mileage basis). While there are shortcomings in comparing both modes on a rate per mile basis, the percentage does provide a directional perspective of both modes.
Diesel Fuel Comments:
The EIA reported average diesel fuel price of $2.424 per gallon this week, which is down $0.003 per gallon from the prior week.
The diesel price per gallon is down $0.608 or 20.1% from the same period last year.
Both WTI and Brent oil are up roughly $1.25 a barrel versus last week with WTI and Brent trading in the range of $42.50 and $45.60, respectively.
The EIA's July 2020 diesel price average price projection is $2.52 per gallon for calendar year.EIA's most recent projection for oil increased from July's projection:
- WTI - $37.55
- Brent - $40.50
The full spreadsheet of the historical weekly price moves of diesel full can be found at https://www.eia.gov/petroleum/gasdiesel/.
Intermodal Spot Rate Trend Graphs
53' Domestic Intermodal Price Index & Diesel Fuel Prices
Variance to January 1, 2013 Baseline
Rolling 52 Year-over-Year Comparison - 53' Domestic Intermodal and Diesel Fuel Prices
Rolling 52 Year-over-Year % Change - 53' Domestic Intermodal and Diesel Fuel Prices
53' Domestic Intermodal and Diesel Prices Quarter-Over-Quarter Comparison