Intermodal Spot Rate Pricing Trendline Analysis - Oct 8, 2019
Weekly discussion and analysis on the trends in the intermodal spot rate market.
The InTek intermodal spot rate index increased 2.2% over the prior week.
For the week of October 8, 2019, domestic intermodal spot rate index:
- Up 2.2% from prior week.
- Down 2.7% from 90 days ago.
- Down 30.8% from prior year.
Lane Stats: 87.9% increased, 0.9% decreased and 11.2% went unchanged.
Outbound SoCal market lanes increased an average of 9.0 % over the prior week, although well off their year-over-year comparison of being down an average of 43.4%.
The key story on peak intermodal shippers need to know is JB Hunt has had a "peak surcharge" on for its customers and the other Class I Railroads have jumped in with their "peak season" surcharge, hence the increase in intermodal spot rates from the prior week.
Of note is an article that was published from the Journal of Commerce (JOC) this week entitled "Intermodal rates provide shippers a glimmer of hope" where they are seeing the spread between truckload and intermodal spot rates begin to widen to more historical levels, although not quite there yet.
North American intermodal volume remains weak, as compared to prior YTD, with volume down 3.0% from prior YTD.
Breaking the volume down by equipment, TOFC is down 13.5% and COFC is down 2.1%.
By region, volume is down 4.1% in the US, up 1.6% in Canada and down 2.7% in Mexico.
Comparison of Truckload to Intermodal Spot Rate
The national truckload spot rate increased 1.4% 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 remain in favor of intermodal, with truckload spot rates down 13.9% and domestic 53' intermodal down 26.0%.
Keep in mind that the truckload spot rate last year had backed off its surge well in advance of intermodal, so it is only natural that intermodal year-over-year percentage decrease is greater than truckload.
Diesel Fuel Comments:
The EIA reported average diesel fuel price of $3.047 per gallon this week, which is down $0.019 from the prior week.
The diesel price per gallon is down $0.338 or 10.0% from the same period last year.
WTI and Brent crude oil pricing is relatively flat this week, with WTI and Brent trading in the range of $53.65 and $59.25, respectively.
The key story to note with diesel and oil prices is the market has settled back down after the quick pop in pricing driven by the bombing of the Saudi oil fields a couple of weeks back.
The backdrop of slowing consumption brought on by a slowing global economy that is the result of the USA and China trade tensions certainly has helped bring the oil prices back down also. Further backing up that statement of a slowing economy hit home with the ISM Manufacturing survey showing its worst reading in a decade.
The EIA's October 2019 diesel price average price projection is $3.05 per gallon for calendar year. This is a $0.02 decrease from August's forecast.
In the same report, the EIA's decreased its average price per barrel oil projections for 2019 from what it had in August's report. The latest projections are below:
- WTI $56.26
- Brent $63.37
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