Intermodal Spot Rate Pricing Trendline Analysis - June 4, 2019
Weekly discussion and analysis on the trends in the intermodal spot rate market.
The InTek intermodal spot rate index increased 0.2% over prior week.
For the week of June 4, 2019, domestic intermodal spot rate index:
- Up 0.2% from prior week.
- Down 4.7% from 90 days ago.
- Down 15.6% from prior year.
Lane Stats: 11.3% increased, 37.4% decreased and 51.3% went unchanged.
We are still expecting one more leg down in rates before they bottom out.
Intermodal volume remains weak, as compared to prior YTD with volume down 1.8% from prior YTD.
Breaking the volume down by equipment, TOFC is down 9.3% and COFC is down 1.1%.
By region, volume is down 2.4% in the US, up 1.5% in Canada and down 4.1% in Mexico.
Comparison of Truckload to Intermodal Spot Rate
The national truckload spot rate increased 3.4% 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 remained in the favor of truckload, with truckload spot rates down 16.7% and domestic intermodal down 13.3%.
Even with the inherent differences in the DAT truckload and InTek intermodal index, the spread is a relative indicator we watch to help gauge the market's appetite for modal conversion opportunities.
As the differential spread between truckload and intermodal indicates, modal conversion is not in favor at this time.
The price advantage shippers have been trained to and now expect for choosing intermodal over truckload is not where it needs to be to drive modal conversion. This is particularly the case in this soft freight environment and when some shippers are feeling service pain from Precision Railroading - PSR and flooding conditions found in many parts of the US.
Diesel Fuel Comments:
The EIA reported average diesel fuel price of $3.136 per gallon this week, which is down $0.015 or 0.5% from the prior week.
The diesel price per gallon is down $0.149 or 4.5% from the same period last year.
WTI and Brent crude oil pricing are taking a big leg down this week, with WTI and Brent trading down from last week $5.30 and $7.60, respectively. WTI and Brent crude oil are trading at $53.25 and $61.78, respectively.
The reason for the nearly 4-month low in oil prices is the result of trade fears slowing the global economy.
The EIA's May 2019 diesel price average price projection for diesel is $3.18 per gallon for calendar year.
In the same report, EIA's average price per barrel oil projections for 2019 were increased to the following:
- WTI $62.79
- Brent $69.64
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