Intermodal Spot Rate Pricing Trendline Analysis - Nov 20 2018
Weekly discussion and analysis on the trends in the intermodal and truckload spot market.
The InTek intermodal spot rate index decreased -2.2% over prior week.
For the week of November 20, 2018, domestic intermodal spot rate index:
- Down -2.2% from prior week
- Down -1.0% from 90 days ago.
- Up 22.1% from prior year.
Lane Stats: 36.0% increased, 58.8% decreased and 5.2% went unchanged.
The SoCal outbound market experienced the deepest price cuts over prior week averaging a little over a 10.% decrease on major lanes.
For a little history, in 2017 the intermodal spot rate continued its climb in "peak season" into December 18 before backing off, while it peaked during the week of November 21 in 2016. Current stats indicate peak rates hit their high during the week of October 29. Peak hitting earlier in the year might give concern to relative market strength of the intermodal spot market, but keep in mind the peak of 2018 is 22.5% higher than the peak of 2017 and this week's rate is still up 18.9% over last year's peak week of December 18, 2017.
More will be known in the coming month as to whether the potential of tariff increases will bump LA / Long Beach port volume giving way to a short-term bump in spot rates going into the end of the year.
Many conversations indicate the inventory pull forward is in play because of tariffs, which if true, will draw down freight activity in the first quarter of 2019 causing more downward pressure on the intermodal and truckload spot rate market.
Comparison of Truckload to Intermodal Spot Rate
The national truckload spot rate, as reported by DAT, decreased $0.01 a mile this week. DAT reported the national truckload spot rate was $2.08 a mile. Truckload spot rates are up 3.5% from prior year.
The percentage spread between the year-over-year truckload and intermodal cost per mile decreased again this week coming in at a 12.1 point spread. While the spread continues to tighten, there is still more room to go before we begin to see shippers look to intermodal before truckload options on the basis of cost.
Diesel Fuel Comments:
The EIA reported average diesel fuel price of $3.282 per gallon this week, which is a $0.035 decrease over prior week. This is the fifth consecutive week of a decrease.
The diesel price per gallon is up $0.37 or 12.7% higher from the same period last year.
Oil prices continue to their push lower again this week, with today's WTI and Brent closing at $53.23 and $62.30, respectively.
Slowing world economies, trade & tariff concerns, stronger dollar and Iran sanctions softened are a few of the stories that continue to drive world oil prices down, although the oil market is hanging on OPEC's direction of possibly cutting production.
The EIA's most current diesel price projection for diesel is $3.15 a gallon for calendar year 2018.
The full spreadsheet of the historical weekly price moves of diesel full can be found at https://www.eia.gov/petroleum/gasdiesel/.
Graphs listed below include:
- 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