Truckload Linehaul, Intermodal Rates Continue Falling

Truckload linehaul rates fell again in July from the same time a year ago, marking the fifth straight month of year-over-year declines, according to latest readings from the Cass Truckload Linehaul Index.

The drop of 1.6% puts the measure at 122.5, but that is up 1.1% from June and is at its highest level since April.

Analysts at the investment firm Avondale Partners predict that pricing will remain down as much as 3% year-over-year for the remainder of 2016.

“Several factors continue to contribute to increased capacity, including driver pay increases; newer, more reliable trucks; overall fleet growth and an easing of the 34-hour restart rule,” the report said.

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 look at trends in baseline truckload prices.

Meantime, intermodal pricing fell 2.4% year-over-year in July, representing 19 straight months of declines.

Despite the drop in the Cass Intermodal Price Index the reading of 123.5 is 2% better when July is compared to June, following three straight month-over-month falloffs.

Historically, there is a "high degree of correlation between truckload and intermodal pricing," according to analysts with Avondale Partners. As contract rates for trucking continue to lose strength and move further into negative territory, “[this] would imply even more potential weakness for intermodal pricing," the report said.

The intermodal index is an indicator of market fluctuations in per-mile U.S. domestic intermodal costs, and includes all costs associated with the move, such as linehaul, fuel and accessorials.

Both the intermodal and the linehaul indices are based on costs as of January 2005 and use a base value of 100. Data is derived from actual freight invoices paid on behalf of freight payment processor Cass Information System and its clients, which totaled $25 billion in 2015.

The reports follow the release of the Cass Freight Index, which measures freight activity across all domestic modes, showing during July overall shipment volumes and pricing were persistently weak, with increased levels of volatility as all levels of the supply chain continue to try to work down inventory levels.

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Reducing costs: Where do I start?

When the costs hit the reports, it is too late. Data is good, but maybe too late! You have to cure the root cause.

There are some simple ways to figure out where you might start to reduce costs. Here are a couple of quick methods that I have been practicing and never will give up.

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Emissions-Free Refrigeration Unit Project Gets $400K Grant

Screenshot via eNow

Renewable energy solutions company eNow has received a $400,000 grant from the San Joaquin Valley Air Pollution Control District to deploy its solar panel refrigeration solution in the area's transportation networks.

The proposed project is meant to demonstrate an electric replacement for truck refrigeration units. ENow is collaborating with Johnson Truck Bodies to provide the demonstration unit, and Challenge Dairy will operate the demonstration vehicle. The deployed trucks will use an all-electric refrigeration unit powered by eNow's solar panels and Johnson All Electric Cold Plate System. These systems are exempt from carbon emissions as defined by the Air Resources Board.

The proposed system uses photovoltaic enhanced battery-electric refrigeration systems augmented with a hybrid active evaporator/cold plate refrigeration system to provide for a 12-hour route operation. The demonstration system will be sized for a medium-temperature application, suitable for produce or dairy product delivery.

Both industrial product manufacturer Emerson and Johnson Truck Bodies will conduct refrigeration system tests in collaboration with eNow and Challenge Dairy, defining parameters for remote monitoring.

“Finding new technologies will be the key to the Valley coming into attainment for tough federal air quality standards,” said Seyed Sadredin, executive director and air pollution control officer of the SJVAPCD. “We are excited to support new technologies that improve air quality and are economically advantageous at the same time. This grant definitely fits that criteria.”

The project is currently in development and is expected to begin testing in September.

Related: Calif. Clean Air Plan Calls for Further NOx, PM Reductions

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Sponsored Content: PC-11: What You Need To Know

What is PC-11?

PC-11 (Proposed Category 11) is a new API specification taking effect on December 1, 2016, that will create two distinct lubricant categories: CK-4 and FA-4.

CK-4: CK-4 replaces CJ-4 and current engine oil standards.

FA-4 represents low-viscosity engine oils intended for modern and future engines.

Why PC-11?

Compared to current CJ-4 formulations, both CK-4 and FA-4 oils will help:

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FMCSA Proposes Younger Driver Pilot Program for Former Military

The Federal Motor Carrier Safety Administration is proposing a pilot program allowing a limited number of drivers between the ages of 18 and 21 to operate commercial motor vehicles in interstate commerce if they received specified heavy-vehicle driver training while in military service and are sponsored by a participating motor carrier.

The program is required by the Fixing America's Surface Transportation (FAST) Act.
During the three-year pilot program, the safety records of these younger drivers (the study group) would be compared to the records of a control group of comparable size, made up of drivers who are 21 years of age or older and who have comparable training and experience in driving vehicles requiring a commercial driver's license. The control group would consist of volunteer drivers who meet specified criteria and are employed by a participating carrier. The comparison of the two groups' performance would help to determine whether age is a critical safety factor.

FMCSA is also proposing criteria for a working group to consult with the Agency in conducting, monitoring, and evaluating the pilot program.

The agency notes that while there has been opposition to previous proposals to allow younger drivers to driver in interstate operations, many intrastate commercial vehicle drivers are already in this age group. But FMCSA is not aware of any studies or published reports comparing their safety performance with that of drivers over 21, either interstate or intrastate. This pilot program would provide much-needed data on the issue.

To have a statistically valid sample of drivers under the age of 21, approximately 200 study group participants are desired. When these individuals reach the age of 21, they would no longer participate in the pilot program and would be replaced by new study group members meeting the eligibility requirements.

Participating carriers that meet the qualifications would sponsor study group members and perform other duties related to the pilot, such as filing certain reports and recruiting existing drivers to participate as control group members. Carriers would be required to install and operate electronic logging devices (ELDs) on all vehicles operated by study and control group drivers. Data from these devices, such as vehicle miles traveled, is essential to analyze driving safety records, the agency notes.

The agency seeks public input during the next 30 days on the pilot program as well as outlined procedural steps and a data collection plan. Comments and data received from the public will be used to further develop the program.

Click here to read the Federal Register notice and provide comments.

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IRTA publishes food rule compliance guides

The International Refrigerated Transportation Association (IRTA), a partner of the Global Cold Chain Alliance (GCCA), has released three resources to help support industry compliance with the Sanitary Transportation of Food Regulation.

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SuperTruck II and beyond: More money on the table for innovation

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