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November 26 2018

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November 26 2018 | The Journal of Commerce 15 www.joc.com Cover Story Broughton said. The Intek Freight & Logistics intermodal spot rate index decreased in the first week of Novem- ber, indicating a dip in transactional pricing, but the index remained 28 percent higher than a year ago. Intermodal data also confirm typ- ical seasonal patterns were upended this year. On a year-over-year basis, international container traffic rose 4.9 percent in June, 6.9 percent in July, and 4.2 percent in August, ac- cording to the Intermodal Association of North America (IANA). Last year, there was more typical ramp-up with volume growing 5.6 percent in June, 8.3 percent in July, and 9.5 percent in August. International cargo rep- resents about 56 percent of volume. But even domestic intermodal, 44 percent of volume, follows the same trend, according to IANA's data. Domestic equipment volume grew 6 percent in June, 7.5 percent in July, and only 5.3 percent in August. By comparison, volume grew 3 percent, 5 percent, and 6.7 percent in those three months, respectively, in 2017. That made September and October seem weaker than expected, surpris- ing intermodal operators that saw volumes rise early in the year. That began to change by the start of the fourth quarter, one of the largest truckload and intermodal operators said. "We are now starting to see the peak season hit, particular- ly in the import locations of Pacific Northwest and Southern California, but we are busy across the board," Mark Rourke, chief operating officer at Schneider National, said Nov. 1. "That said, there are still pockets that are more robust than others." The "import centers" are seeing a "typical peak season," Rourke said. "The demand by mode for intermodal and for our team service to expedite product inland is growing, and we expect to be incredibly robust as we would normally expect in the fourth quarter, and so, to us, it seems fairly average in that respect." That's fairly average for Schneider and other carriers in that demand is rising, but how and when and where it rises is likely to shift and change as the US economic recovery nears its 10th anniversary next June. JOC email: bill.cassidy@ihsmarkit.com twitter: @willbcassidy ment. "Our realized contract pricing forecast for 2018 of 6 to 12 percent is essentially 'in the books,'" Broughton said. "We believe this is the stron- gest normalized (outside extreme periods of recovery from recession) percentage level of truckload pricing achieved since deregulation." Heading toward the fourth quar- ter, intermodal pricing, especially spot pricing, often outstripped truck- load pricing, a sign of how tight and closely managed intermodal capacity has become in the era of precision scheduled railroading. Cass's Inter- modal Pricing Index, which unlike its truckload linehaul index includes fuel surcharges, rose 10.9 percent year over year in October. "Tight truckload capacity and higher diesel prices continue to create incremental demand and pricing pow- er for domestic intermodal," Donald rate hitting $3.56 per mile. By mid-November, the average national DAT Solutions dry van rate had stabilized at $2.09 per mile after dropping from an average of $2.17 per mile in the first week of October. "We expected a seasonal rebound in October, but it was interrupted by hurricanes Florence and Michael in the southeastern US, as well as Typhoon Mangkhut in Hong Kong," said Peggy Dorf, DAT market analyst. "Some of that demand for truckload capacity has shifted into early November, with imported goods moving from seaports to regional distribution centers." The Cass Linehaul Truckload Index showed contract truckload rates remained on an upward course over the fall. Contract rates tend to lag changes in the spot market by as much as six months. In October, the truckload pricing index rose 8.2 per- cent year over year to 143.4, a record high on a nominal basis and increased 1.9 percent from September. "We expect more nominal record highs in the coming months, with slightly lower percentage increases as comparisons grow increasingly tough through February," Donald Brough- ton, analyst and commentator for the Cass indexes, said in a Nov. 12 state- "The driver shortage and trucking capacity issues, these are trends that are not going away." pio3 / Shutterstock.com

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