Truckload Strong; Intermodal Weak

I have not reviewed the CASS information for a while but have used other sources which have all told the same story.  Intermodal freight is soft relative to capacity which is putting pressure on rates.  However, the September truckload numbers show strong expenditure increases with shipments staying moderate.  Translate this into higher rates.

To show the issue with the intermodal market right now look at the chart above.  Clearly, going into Q2 in both 2012 and 2013 we see the price index decrease.  However, in the latter half of 2012 it rebounded.  In 2013 it tried but quickly was rebuked.  IM rates are in check mostly due to the capacity situation.

The real question though is whether this is a short term bump (The Christmas "rush") or is this a long term trend.  My belief is to watch it closely but be skeptical of anyone who says this is a long term trend.  Hours of service or none I believe there is no evidence to show the economy picking up or shipments growing rapidly.  Yes, there are bumps up and bumps down but the trend is pretty flat.

Don't get involved in what I call the fear trade.  The fear trade is when your carrier base comes running to you as soon as some data supports higher prices and tells you to "pay up".  Watch the data closely and I think you will find this to be a blip.