Intermodal Spot Rate Pricing Trendline Analysis - Feb 26 2019 Blog Feature
Rick LaGore

By: Rick LaGore on February 26th, 2019

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Intermodal Spot Rate Pricing Trendline Analysis - Feb 26 2019

Intermodal | diesel fuel price | truckload | intermodal spot rate index trendlines | intermodal spot rates

Weekly discussion and analysis on the trends in the intermodal spot rate market.

intermodal and truckloadThe InTek intermodal spot rate index increased 0.7% over prior week. 

For the week of Feb 2, 2019, domestic intermodal spot rate index:

  • Up 0.7% from prior week.
  • Down 16.9% from 90 days ago.
  • Down 6.0% from prior year.

Lane Stats: 73.0% increased, 7.9% decreased and 19.1% went unchanged.   

Intermodal spot rates continue to hold relatively flat the past three weeks. 

The year-over-year comparison flipped to negative last week and continued the pattern this week.  The negative year-over-year trend will continue for many weeks to come because the 2018 intermodal spot market experienced explosive growth that will be hard to beat without an economic spike that is not currently in any economic forecasts. 

Intermodal Volume Comments

Two behemoths in the retail industry, Amazon and Walmart, are shaking up the logistics and supply chain industry by insourcing more freight on company owned equipment and resources.  

In the article published by Supply Chain Dive entitled Walmart stand up container fleet, uses drivers for drayage shared the following insights:

  • Walmart launched its own fleet of intermodal containers and begun using its own drivers to move containers. 
  • The pilot began in the summer of 2018 and covered some loads coming out of SoCal.
  • Program described as "supplemental" capacity.
  • The Walmart containers are unique to the company include chassis and double stacking capability, along with a roll-up door.  The configuration allows for more flexibility in unloading at stores.  
freight pricingAs for Amazon, they continue to insource more of their freight capacity internally on their own equipment also.  In an article by Transport Topics, Amazon.com "Insourcing" Roils Freight Industry, Analysts Say, outlines the role it played in shuttering New England Motor Freight (NEMF), pulling $600 million of revenue from XPO and its focus on taking on more of UPS and FedEx parcel volumes through its various programs.  There is also evidence Amazon is also pulling in volumes on its own 53' domestic intermodal boxes.
 
While these stories may seem more of an internal story to both these companies, they will continue to impact the logistics service providers  (LSP's) and motor carriers in a negative way by pulling volume off their buys.  Initially, it will help shippers in pricing power, as the LSP's and motor carriers drop their prices to hold less profitable volumes in their organization and put freight in their trucks it will impact some, as it did NEMF.  Add to it, some of the smaller LSP's and IMC's will also need to change or parish, as it will be harder for them to compete in pricing alone.  
 
While the short-term could be a win for shippers, the long-term situation is it will pull competition from the marketplace and hurt companies that have not built a strong logistics and supply chain team.  Something to think about ahead of the turn is to evaluate internally developing the expertise or align with a managed transportation service solution.
 
These developments are definitely a story that will continue to evolve and one to pay close attention to in the coming months and year. 

 

Comparison of Truckload to Intermodal Spot Rate 

The national truckload spot rate, as reported by DAT, decreased $0.01 a mile or 0.5% from the prior week.  DAT reported the national truckload spot rate was $1.89 a mile.   Truckload spot rates are down 13.0% from prior year.   

It's suboptimal for modal conversion (truckload to intermodal) when the national truckload spot rate per mile is down 13.0% on a mileage basis from the prior year, while the national intermodal spot rate per mile is down only 3.8%.     

Diesel Fuel Comments: 

diesel fuel priceThe EIA reported average diesel fuel price of $3.048 per gallon this week, which is up $0.042 from the prior week.

The diesel price per gallon is up $0.041 or 1.4% higher from the same period last year.

WTI and Brent crude is down roughly $0.75 a barrel from the prior week, with WTI and Brent closing $56.02 and $65.53, respectively.   

Oil prices continue to be a big question mark for many logistics professionals in 2019, with political pressure, projections of slowing world economies, building oil inventory, trade & tariff concerns and stronger dollar.

The EIA's most current diesel price projection for diesel is a $2.94 per gallon price for 2019.  

The February EIA price per barrel projections for 2019 inched up this month with the new thinking being the average WTI and Brent prices per barrel for 2019 to be $54.79 and $61.03, respectively.

The full spreadsheet of the historical weekly price moves of diesel full can be found at https://www.eia.gov/petroleum/gasdiesel/

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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

  Intermodal Spot Rate and Diesel Fuel 2.26

Intermodal Spot Rate and Diesel Fuel Baseline 2.26

Intermodal Spot Rate and Diesel Fuel Yr-over-Yr Comparison 2.26

Intermodal Spot Rate and Diesel Fuel Yr-over-Yr Percentage 2.26

Intermodal Spot Rate and Diesel Fuel Qtr-over-Qtr Comparison 2.26

For more on 53' domestic intermodaltruckload , cross-border and managed transportation services, please sign-up for our weekly blogs and visit the InTek Freight and Logistics website.

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About Rick LaGore

Rick is the co-founder and CEO of InTek Freight & Logistics, a company focused on being the place where companies come when faced with a logistics problem.

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