Intermodal rates remain strong, ready to surge
May 11, 2011
Intermodal base rates are rising faster than truck, but once fuel surcharges are factored in, the rate of increase is less than truck. Intermodal rates are rising faster than carload rates.
FTR estimates that intermodal rates have risen at about a 7-8% clip for the better part of a year. Rates are poised to start a period of stronger growth as we hit the summer months. This is due to a convergence of 3 main components: Tight truck capacity, high fuel prices, and freight growth.
Rates have been under pressure from container shortages – relief for that will not come until late 2011. There is considerable upside potential for rates should truck rates spike in 2011 or 2012.
Shorter haul intermodal rates will rise in 2011 as fast as the increase in truck rates will allow. Long-haul rates will also increase, pushed up by increases in underlying rail costs.
The next 2 years should see an extended period of very strong rate increases, across many modal options.
NOTE: Our data for the first 3 months of 2011 are still estimates as we await the final release of Q1 data from the railroads.
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