Truckload Linehaul, Intermodal Rates Drops Forecast to Continue

Truckload linehaul and intermodal rates are continuing their declines despite some slight improvements, according to two new reports.

The Cass Truckload Linehaul Index decreased 3.5% year-over-year in September. While this marks the seventh straight year-over-year drop, the latest reading of 123 is the highest since April, due in part to a month-over-month improvement of 1.3% following a drop of 0.9% in August and a hike of 1.1% in July.

Analysts at Avondale Partners predict that rates will remain about the same through mid-2017, thanks to softening demand and increasing capacity, ranging from 3% lower to 1% higher.

The investment bank also cited other factors putting pressure on pricing, including carrier bankruptcies at historic lows, truck counts up by single digits, and the relaxation of the 34-hour restart rule for drivers.

The index is an indicator of market fluctuations in per-mile truckload pricing, isolating the linehaul component of full truckload costs from other components, such as fuel and accessorials, providing a reflection of trends in baseline truckload prices.

Meantime, a gauge of intermodal rates fell only 0.7% in September compared to a year earlier, its smallest year-over-year drop since January 2015.

The Cass Intermodal Index moved 1.1% lower in September from August, to a reading of 124.2, following monthly gains of 1.6% in August and 2% in July, with average monthly decreases of 2.4% over the previous 20 months.

Despite this reprieve, Avondale Partners expects intermodal rates to continue their decline through the remainder of 2016 as lower oil prices negatively impact U.S. domestic demand.

"We have historically observed a high degree of correlation between truckload and intermodal pricing, and know that should truckload rates accelerate in the coming months, intermodal rates would normally follow," Avondale said. "That said, contract rates for trucking have been losing strength, even going negative in many lanes, which would imply even more ...Read the rest of this story

ATA: Truck tonnage dipped in September

The American Trucking Associations (ATA) for-hire truck tonnage index contracted 5.8% in September, following a revised 5% rise during August.

Compared with September of last year, the trade group's tonnage index is down 0.7%, the first year-over-year decline since October 2015. Year-to-date, however, compared to the same stretch in 2015 ATA noted that tonnage is up 3%.

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Digging into the new diesel engine oils: Part two

Dan Arcy, the global OEM technical manager for the Americas for Shell Lubricants, that out of the three “phases” within the Proposed Category 11 or “PC-11” five-year development process that will result in the new CK-4 and FA-4 diesel engine motor oils on Dec. 1, the second phase proved to be the hardest and longest.

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Don’t raise the bar — reduce the variation

The chart below was just released by ATRI, the American Transportation Research Institute, in A Survey of Fuel Economy and Fuel Usage by Heavy-Duty Truck Fleets.

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ATRI releases fleet fuel economy, usage findings

The American Transportation Research Institute (ATRI), in conjunction with the University of Michigan Transportation Research Institute (UMTRI) and research sponsor ExxonMobil, released results of their investigation of fleet fuel economy and fuel usage.

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Commentary: The Heady Pace of Technology

Deborah Lockridge

As I write this at the end of September, it's been a dizzying month of technology advances. We're talking a stream of amazing stuff straight out of a science fiction story.

The IAA Commercial Vehicles Show in Germany, for instance, highlighted what in Europe they call “digitization,” along with electric mobility and urban logistics, under the banner of “New Mobility World Logistics.” There were electric vans and autonomous trucks. Heads-up windshield displays with virtual side-view mirrors. Systems that can back up a truck to the dock without a driver at the wheel. Concept urban vehicles with delivery drones and robots and self-loading systems. (We'll have more on what we saw at IAA in next month's issue.)

On the plane trip home, I read a column in the International New York Times suggesting that presidential candidates Donald Trump and Hillary Clinton talk in their first debate about what they're going to do about self-driving trucks.

Then Reuters published an article about Uber's plans to transform the trucking industry, on the heels of its purchase of autonomous truck tech startup Otto. And UPS staged a test using a drone to deliver medication in a hard-to-reach location.

This is all after the Department of Transportation published its first set of guidelines for the development and regulation of autonomous vehicles.

Navistar and Volvo both unveiled their SuperTruck concept trucks, achieving 12 and 13 mpg. The North American Council on Freight Efficiency released a report on two-truck platooning's potential for fuel savings.

And it's not just technology on the truck itself. The TMW/PeopleNet In.Sight conference highlighted how information technology, telematics, the Internet of Things and Big Data can transform the way the transportation industry works, keep the driver connected, and help fleets make better decisions both in real time and for long term strategies.

At FTR's annual conference, along ...Read the rest of this story

Class 8 Update: Downturn, But Far From Bad Times

Production cutbacks should reduce heavy truck inventories, but are fleets waiting for new, more fuel-efficient models to appear?

Class 8 truck orders have fallen and the truck builders have cut back production, but these are far from bad times for the truck-building industry, and manufacturers say 2016 North American sales should finish up at a respectable 220,000 to 240,000.

“The truck market reflects the good economy and high freight tonnage levels,” says Gary Moore, executive vice president at Paccar, parent of Kenworth and Peterbilt.

John Walsh, vice president, global marketing and brand management at Mack, further explains, “Highway business is off, but construction remains strong, and that's our silver lining, because Mack has always been strong in construction trucks — that and refuse.”

All economic indicators look positive, according to the National Association for Business Economics, whose members predict the gross domestic product will grow 1.5% this year and 2.3% next year. They don't see a downturn until 2018.

Marketers at the truck manufacturers agree: “We still see positive trends in housing construction, automotive sales and in the economy in general for 2017,” says Anthony Gansle, on-highway product manager for Peterbilt. “Next year should also benefit from getting past the election cycle. We would expect the industry to see around the current replacement rate.”

So what's causing the current downturn? Fleet hunger for road-going equipment, to replace worn-out iron run through the Great Recession and beyond, was satiated. But truck builders did not cut back production as soon as they should have.

“Truck inventory is high,” says Walsh. “We were slow to adjust. We had some earlier layoffs, and we're taking down weeks now, one week a month when we're shutting down, through December.”

Steve Gilligan, vice president, product marketing at Navistar International, had another read on the falling orders situation. “In summer the market normally dips,” which ...Read the rest of this story