[PDF] US Intermodal Savings Index - JOCcom PDF US%20Intermodal%20Savings%20Index%204q2019.pdf

3 fév 2020 · Spot intermodal rates sequentially fell four- tenths of a cent to $1 55 per mile for the final three months of 2019 Spot truckload rates rose 5 cents to $1 75 on a rolling three-month average Contract intermodal rates rose 2 cents to $1 46 per mile and truckload contracts declined a penny to $1 81

12 nov 2019 · With continued demand for freight, contract prices should maintain stability in 2019; however, spot market prices will remain volatile External

Short-Term Truckload Spot Rates’ Prediction - IEEE Xplore

14 mai 2020 · Further research could focus on rates' standardization, to define a practical freight index for the trucking industry Although our results are specific

[PDF] Q3-Carrier-Rate-Report-1pdf - FreightWaves

The trucking market today is as healthy as it has been since 2017– early rejections of above 20 ), Truckstop com national spot rates are currently running 25 + above 2019 levels, with rising rates on almost all major lanes and rising spot

[PDF] US Intermodal Savings Index - JOCcom

[PDF] Download Market Update - Transplace

1 avr 2020 · further exacerbated by rapidly declining spot rates and significant discounts Source data and charts: FTR Trucking Update - December 2019

[PDF] Download Transplace Market Update Q2 2020

Spot rates have dropped sharply for the last couple of weeks at $1 71 All segments now forecast for negative comparisons with 2019 except refrigerated ▫ Dry van loadings The Trucking Conditions Index is set to turn sharply negative

[PDF] TRUCKING & LOGISTICS REPORT - Bridgepoint Investment Banking

Q3 2019 BRIDGEPOINT INSIGHTS Trucking company median EBITDA Van and Reefer Spot Rates Begin to Improve as Holiday Freight Starts to Move $1 81

[PDF] European Road Freight Rate Development Benchmark - HubSpot

The Ti Upply European Road Freight Benchmark for Q3 2019 was flat, with average freight rates in the region unchanged from the previous quarter at € 1,180

US Intermodal Savings Index

An Analysis of the Domestic Intermodal and Truckload Markets

4Q2019

Journal of Commerce | Insight

Ari Ashe

Associate Editor, Journal of Commerce

Author Name

IHS Job Title

IHS Markit | US Intermodal Savings Index: 4Q19

Executive Summary 3

Historical Perspective/Future Outlook 4-5

The Distance Discussion 6

Market Breakdown 7

Methodology/Acknowledgements 8

Quotes from Earnings Calls 9

IHS Markit | US Intermodal Savings Index: 2Q16

US Intermodal Savings Index

An Analysis of the Domestic

Intermodal and Truckload Markets

Ari Ashe, Senior Editor, Journal of Commerce

The Journal of Commerce (JOC) provides an in-depth quarterly report into the intermodal market to encourage conversations between shippers and transportation partners about modal decisions.

How to Read Our Index

The Domestic Spot Intermodal Savings Index

Domestic Contract

Intermodal Savings Index

) is measured with 100 as a base level. Index values greater than 100 signify intermodal is cheaper; values less than 100 indicate truckload is cheaper. Index values are linked to percentages:

110 = Intermodal 10% cheaper

120 = Intermodal 20% cheaper

95 = Truckload 5% cheaper

90 = Truckload 10% cheaper

For an in-depth review of the Spot and Contract Index,

Executive Summary

The fourth quarter began in a lackluster fashion for both our Contract ISI and Spot ISI. Both indexes, however, ended the year on a strong note for intermodal providers.

While the Fall of 2018 showed the industry how

setting intermodal rates too high can cause our Index to plunge, last year our data moved based on the flow of the trucking market rather than railroads.

Intermodal rates remained steady between 2Q19 and

4Q19. Spot intermodal rates sequentially fell four-

tenths of a cent to $1.55 per mile for the final three months of 2019. Spot truckload rates rose 5 cents to $1.75 on a rolling three-month average. Contract intermodal rates rose 2 cents to $1.46 per mile and truckload contracts declined a penny to $1.81.

The averages are unweighted and based on 115

modally competitive lanes. The results do not reflect the entire market but a subset. The Spot ISI surged in December after truckload rates grew 12 cents from November in our lanes. The Contract ISI rose slightly in December after a small bump in trucking contract rates. Industry analysts, however, expect dry-van contract rates to be flat in the first half of 2020, continuing to depress the Contract

ISI in the short term.

As we dig deeper into the numbers, we will address several questions: How do the full year ISI values compare with prior years? And where should we expect the values to go in 2020? Which lanes are pro-intermodal and pro-trucking?

Which lanes are up for grabs?

To what extent does length of haul matter? Should I avoid intermodal on lanes less than 1,200 miles?

IHS Markit | US Intermodal Savings Index: 4Q19

Historical Perspective

Volume in 2019 was weak for Class I railroads.

Although operating ratios went down, which pleases investors, volume and savings were below historical norms. Intermodal volume fell 4.2% in 2019, according to the Intermodal Association of North America. Domestic intermodal volume, which is what our ISI tracks, declined 6.1 percent for the year. The Spot ISI improved to 110.3 in 2019 yet fell short of the five-year average of 113.9. The Contract ISI declined to 119.4, the first annual result below 120 and lower than the five-year average of 124.8.

Spot ISI in 2019

The trucking industry is the primary catalyst of how much shippers save on intermodal. The historical Spot ISI chart shows the crater of 2018 is far behind us and the 2019 market benefited from some easier year-over- year comparisons.

By comparing JOC Spot Truckload Rate against the

Spot Intermodal Rate, we can see the gap reopen.

Railroads priced themselves out of spot business in late 2018 by overshooting truck rates, perhaps intentionally, perhaps unintentionally. The price difference between the modes was tight until May 2019 when the truckload spot market hit bottom. Since June, truck rates have recovered, but intermodal spot rates have remained flat.

Contract ISI in 2019

Contract truckload rates often trail spot rates by several months. Contract truck rates turned negative in

May, according to DAT Solutions. Channel checks

with truckload fleets have indicated 2020 contract rates are expected to be flat to down early in the year but higher for bids later in the year.

Meanwhile, annual rail contracts tend to always

increase barring an economic recession. Railroads often push aggressive increases, intermodal marketing companies push back with lower increases, and generally the two sides meet in the middle. As it relates to the Contract ISI, trucking tends to move the needle. If truck contract rates grow, so does the ISI. If truck rates are flat to down, the ISI will fall. The averages show this cyclicality. The rolling 12- month Contract ISI dropped in 2016 when truck rates went down, but grew in 2018 when truck rates surged double digits.

IHS Markit | US Intermodal Savings Index: 4Q19

Charting Contract Truckload Rate against the

Contract Intermodal Rate shows how rail rates

virtually never recede.

The Future Outlook

Intermodal volume is down 4.5 percent through the

first five weeks of 2020, according to the Association of American Railroads. Both western railroads are struggling so far this year, although a year ago the pull forward cargo reaching West Coast ports in December

2018 made its way through the intermodal network in

January 2019.

Union Pacific Railroad volume has plunged 12.9

percent year over year through Week 5. BNSF

Railway intermodal volume is down 4.3 percent.

One West Coast source told us he 300 empty Hub

Group and 100 EMHU/CSXU containers stacked in

the yard overlooking his office. Draymen are calling looking for work, he said.

Nevertheless, itto forecast what will happen in

2020. Trucking executives have said they expect rates

to trail 2019 levels until midyear. Spot rates hit a low n

May 2019, so this is the natural point when

comparisons return to positive territory. Trucking executives hope the momentum carries into the summer and flips the market in the second half.

Shippers could certainly secure contract rate

reductions in early 2020, depending on the lane. If the spot market heats up in the second half, then fleets will push for contract rate increases later this year.

Shippers should also pay close attention to

company, is more bullish on manufacturing than the

Institute for Supply Chain Management.

The US-Mexico-Canada Trade Agreement is a positive for trucking and intermodal rail. However, the

IHS Markit | US Intermodal Savings Index: 4Q19

The Distance Discussion

Length of haul is an important factor in modal decisions because intermodal saves more with distance. Like any transportation provider, Class I railroads have fixed costs that they pass onto the shipper. Longer distances help railroads to defray those costs with less of an impact on the shipper than short hauls.

Less than 700 Miles

We track seven lanes of 700 miles or less. The lanes are either pro-trucking or up for grabs lanes. The 12-month average of them is 89.0. The pro-trucking lanes consist of Atlanta to Jacksonville, Atlanta to Orlando, Chambersburg to Chicago, and Salt Lake City to Los Angeles. The up for grab lanes are Syracuse to Chicago, Baltimore to Chicago, and Chambersburg to Chicago, but the three have been pro-trucking in the past.

800 to 1,200 Miles

This is the distance in which the most heated competition between trucking and intermodal takes place. Many lanes are in the eastern US, connecting the

Midwest, Southeast, and Northeast.

The rolling 12-month Spot ISI average for this distance (gray line) is 99.7 but was as low as 91.0 in February

2019. Intermodal will need to provide stronger savings

on these lanes to get rail conversion. The highest this segment has been was 109.6 in January 2016, the first

12-month average available, which is still below the

13.9% national average (113.9) for all lanes since 2015.

are up to the national average. We can say with 95.5% accuracy (two standard deviations) that the rolling 12- month average will be between 90.6 and 113.7. Truck competitive lanes such as Atlanta to Elizabeth,

NJ and vice versa, Charleston to Chicago, and

Charlotte to Chicago make intermodal a tough sell.

1,200 to 2,000 Miles

The 1,200- to 2,000-mile segment (teal line) had a 123.7 Spot ISI in Jan. 2016; in December 2019 it was 109.4. The trend is heading in the right direction. In December

2018, the annual average was only 95.6. What was an

increasingly truck competitive segment is trending back to pro-intermodal.

2,000 Miles+

On a rolling six-month basis, this segment has a strong rebound. The Spot ISI for 2018 was 109.8, below the national five-year average savings of 113.9. For 2019, ense. Even our two Cincinnati outbound lanes, which are truck competitive on the Spot ISI, are a good intermodal bargain under a contract. Class I railroads and asset-based intermodal marketing companies believe the index values will grow as truckload spot and contract markets strengthen. Railroads and IMCs have been clear in recent quarters the cyclical nature of transportation. We recommend shippers close examine their options with freight traveling less than 1,200 miles.

IHS Markit | US Intermodal Savings Index: 4Q19

The Market Breakdown

In this section, we examine which markets are pro- intermodal, pro-trucking, and up for grabs.

We encourage shippers to use this as a beginning

not an end to a discussion with your partners about your network. make any decisions solely on what you read in this report. Please review this infographic like a traffic light.

Green means go strong spot intermodal savings.

Yellow means slow down truck is competitive.

Red means stop no spot intermodal savings.

Given the accessorial fees common in rail, a yellow in our calculation. Out of 187 lanes we study for this report, 109 (58.3%) were green lanes, 41 (21.9%) were red lanes, and 37 (19.8%) were yellow in 2019.

Chicago was our choice because the spread between

truck and rail was tight a year ago. But as shippers bid in 2020, the gap has widened to historical levels. Rates into Dallas-Fort Worth have always been truck competitive, so the tightness is not a new situation. It serves as a reminder, though, that shippers should evaluate the pros and cons of transloading on a Los

Angeles to Dallas haul.

Shippers should also pay close attention to Atlanta outbound. Atlanta to Chicago is an interesting case study. The distance is roughly 715 miles, a next day truck delivery. The rail option can take as little as two days but also be four days. If the entire transit experience is flawless issue. If there are delays, however, the small savings

IHS Markit | US Intermodal Savings Index: 4Q19

Eastern US Network

Much of the US domestic eastern intermodal network volume travels within a triangle of Chicago, New York, and Atlanta. The area includes Pennsylvania, Ohio, Indiana, and Kentucky, all warehousing hubs. These are shorter lengths of haul that are more truck competitive than transcontinental routes.

On a monthly basis about 125,000 domestic loads

travel within this triangle, according to IANA, more than half the total volume in the three regions.

Methodology

The Journal of Commerce evaluates 187 lanes in our study of modal savings. For the Spot ISI and Contract

ISI, we use a sample of 115 lanes. Each month, we

send estimates to a group of third-party logistics providers and shippers under non-disclosure agreements. A few sources agree to be named, but most participate on the condition of anonymity. We provide estimates on 45 lanes to 3PL and shipper partners to review and revise. Our estimates include margins and fuel surcharges but exclude accessorial fees such as detention or demurrage. Our data contributors review their transactions to provide us retail invoice rates for the previous month. JOC takes those responses to calculate intermodal and truckload per mile averages. The base value is 100, which means a shipper pays the same rate in either mode. If intermodal rates are 20 percent cheaper, then the value is 20 percent higher than 100, or 120. If truck rates are 20 percent cheaper, then the value is

20 percent lower than 100, or 80.

JOC calculates regional index values for the Midwest,

Mountain, Northeast, Northwest, Southeast, South

Central, and Southwest US.

A national number is then calculated on a weighted basis using 53-foot equipment flow data from IANA.

The weighting differs each month based on small

market share shifts. The sum of the weighted values becomes the national ISI.

Acknowledgements

Although we cannot disclose the identities of most contributors to the Index, we thank them for participating. Their input is critical to provide accurate insights for shippers to make informed modal decisions with logistics partners.

Names we can disclose are InTek Freight and

Logistics, Sunset Transportation, Transfix, and Zipline

Logistics.

We thank Rick LaGore of InTek Freight and Logistics for providing weekly intermodal spot data on more than 115 lanes. We make slight variations to his data based on asset-owning intermodal marketing companies offering slightly lower rates. We also thank IANA for tracking the equipment flows of containers and trailers on the rails. Without this key data, our weighted national ISI and market-by-market analysis would be impossible. Both InTek and IANA provide a valuable service to the transportation industry.

DAT Solutions also played a key role before our

official launch to help fill some of the gaps in our data in the Pacific Northwest in 2015 and 2016 where our sources didn't have as much historical information. We also consult DAT Solutions data to ensure our estimates to 3PLs and shippers are close to accurate as possible for a review. Finally, we would like to thank our parent company

IHS Markit for their continued support of JOC.

IHS Markit | US Intermodal Savings Index: 4Q19

Quotes from Earnings Calls

in the East because the customers are able to secure truckload capacity at rates equal to or better than intermodal. And until we can offer economics and service, combined, that outperform truck, we're going to be challenged there Darren Field, executive vice president of intermodal, J.B. Hunt Transport Services. Clearly, the Eastern Network is where the bulk of the highway capacity challenges is really hurting intermodal's ability. Both Eastern railroads have improved their service in the back half of 2019, and

Field continued.

We're not looking to grow by just to going out and slashing rates. That's not our game plan. That's not what we're going to do but the truck environment is still pretty loose to build as we saw it last quarter. We don't think there's going to be any meaningful snapback or tightening there but clearly if that happens it'll be a demand driven environment and that would be

Jamie Boychuk, executive vice

president of operations, CSX Transportation. ppetite changes from our customers relative to looking for opportunities to maximize intermodal. Obviously, we've seen some conversion back to over the road Mark

Rourke, CEO of Schneider National.

The truck market remains loose with spot rates

leveling off, yet our customers and data providers forecast some tightening later in the year. Based on this information and new business initiatives, our intermodal revenue and volume are expected to grow in 2020 Alan Shaw, executive vice president of sales and marketing, Norfolk Southern Railway.

Author

Ari Ashe

Senior Editor, Journal of Commerce

202-548-7895 (office)

ari.ashe@ihsmarkit.com

CustomerCare@ihsmarkit.com

Americas: +1 800 IHS CARE (+1 800 447 2273)

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[PDF] [PDF] US Intermodal Savings Index - JOCcom

US Intermodal Savings Index

4Q2019

Journal of Commerce | Insight

Ari Ashe

Associate Editor, Journal of Commerce

Author Name

IHS Job Title

IHS Markit | US Intermodal Savings Index: 4Q19

Contents

Historical Perspective/Future Outlook 4-5

The Distance Discussion 6

Market Breakdown 7

Methodology/Acknowledgements 8

Quotes from Earnings Calls 9

IHS Markit | US Intermodal Savings Index: 2Q16

US Intermodal Savings Index

An Analysis of the Domestic

Intermodal and Truckload Markets

Ari Ashe, Senior Editor, Journal of Commerce

How to Read Our Index

The Domestic Spot Intermodal Savings Index

Domestic Contract

Intermodal Savings Index

110 = Intermodal 10% cheaper

120 = Intermodal 20% cheaper

95 = Truckload 5% cheaper

90 = Truckload 10% cheaper

Executive Summary

While the Fall of 2018 showed the industry how

Intermodal rates remained steady between 2Q19 and

4Q19. Spot intermodal rates sequentially fell four-

The averages are unweighted and based on 115

ISI in the short term.

Which lanes are up for grabs?

IHS Markit | US Intermodal Savings Index: 4Q19

Historical Perspective

Volume in 2019 was weak for Class I railroads.

Spot ISI in 2019

By comparing JOC Spot Truckload Rate against the

Spot Intermodal Rate, we can see the gap reopen.

Contract ISI in 2019

May, according to DAT Solutions. Channel checks

Meanwhile, annual rail contracts tend to always

IHS Markit | US Intermodal Savings Index: 4Q19

Charting Contract Truckload Rate against the

Contract Intermodal Rate shows how rail rates

The Future Outlook

Intermodal volume is down 4.5 percent through the

2018 made its way through the intermodal network in

January 2019.

Union Pacific Railroad volume has plunged 12.9

Railway intermodal volume is down 4.3 percent.

One West Coast source told us he 300 empty Hub

Group and 100 EMHU/CSXU containers stacked in

Nevertheless, itto forecast what will happen in

2020. Trucking executives have said they expect rates

May 2019, so this is the natural point when

Shippers could certainly secure contract rate

Shippers should also pay close attention to

Institute for Supply Chain Management.

IHS Markit | US Intermodal Savings Index: 4Q19

The Distance Discussion

Less than 700 Miles

800 to 1,200 Miles

Midwest, Southeast, and Northeast.

2019. Intermodal will need to provide stronger savings

12-month average available, which is still below the

13.9% national average (113.9) for all lanes since 2015.

NJ and vice versa, Charleston to Chicago, and

1,200 to 2,000 Miles

2018, the annual average was only 95.6. What was an

2,000 Miles+

IHS Markit | US Intermodal Savings Index: 4Q19

The Market Breakdown

We encourage shippers to use this as a beginning

Green means go strong spot intermodal savings.

Yellow means slow down truck is competitive.

Red means stop no spot intermodal savings.

Chicago was our choice because the spread between