WASHINGTON--(BUSINESS WIRE)--Aug 13, 2019--

U.S. railroads experienced a further deterioration of their price advantage for domestic intermodal shipping compared to trucking in the second quarter, according to a new index by global business information provider IHS Markit (NYSE: INFO). This latest contraction in the domestic intermodal pricing edge continues a trend that began in the first quarter of 2018.

The dwindling pricing advantage means that there is less financial incentive for shippers to transport cargo “intermodal”—that is via rail, where it is onloaded and offloaded by trucks—rather than just utilizing trucking for the entire length of the trip. Shippers compare transit times, on-time performance, and total cost between intermodal (truck and rail) and just trucks when deciding how to move their freight.

The new U.S. Domestic Intermodal Savings Index produced by IHS Markit’s JOC shows that U.S. domestic intermodal shippers do not save as much by converting loads from the highway to the rails as in recent years. Trucking services have been more competitive on lanes under 2,000 miles, the index shows.

The release of the quarterly index comes as U.S. railroads face slowing freight growth and U.S. trucking spare capacity increases, creating a new buying dynamic for U.S. shippers moving goods via 53-foot containers and trailers.

The index is produced by JOC, part of the Maritime & Trade business at IHS Markit. The index is available to JOC.com and The Journal of Commerce magazine subscribers.

“The new data from the U.S. Domestic Intermodal Savings Index illustrates how shippers and brokers are becoming increasingly sensitive to whether intermodal or trucking is best for the various lanes they manage,” said Ari Ashe, associate editor, JOC and author of the report. “With C-Suite pressures to keep transportation costs down, shippers are looking to make the most informed decisions about modal choices to wisely spend down.”

The new index uses a base of 100. Values above that mark mean that intermodal spot rates are cheaper. When the index is below 100, that signifies that truckload spot rates are cheaper.

Through the first half of 2019 the index is 106.7. Spot intermodal rates have gradually declined since 2015. The index even dropped below 100 on a national basis between August 2018 and October 2018 as intermodal spot market rates shot up higher than trucks in major markets across the country. Although the index has recovered since October, intermodal savings were still lower in the first two quarters compared with one year ago.

The new U.S. Domestic Intermodal Savings Index utilizes a proprietary JOC data set of intermodal and truckload rates through partnerships with various third-party logistics companies and shippers. The truckload information consists of the average of actual invoiced prices issued to shippers in the prior month, rather than the rates paid to drivers.

The index evaluates 45 high-volume lanes in which intermodal and full truckload compete for shipper’s business. An additional 60 secondary lanes with both modal options are also tracked to develop a standard index value to facilitate conversations between shippers and their transportation partners about the best solutions for them.

The JOC is the historic Journal of Commerce shipping newspaper that is now a focused business intelligence unit within IHS Markit, concentrating on international containerized transportation and logistics, freight markets, technology and strategy.

About IHS Markit ( www.ihsmarkit.com )

IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.

IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2019 IHS Markit Ltd. All rights reserved.

CONTACT: News Media:

Jeff Marn

IHS Markit

+1 202 463 8213

+1 303 858 6417

KEYWORD: DISTRICT OF COLUMBIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: OTHER TRANSPORT TRUCKING RAIL MARITIME TRANSPORT PROFESSIONAL SERVICES OTHER PROFESSIONAL SERVICES

SOURCE: IHS Markit

Copyright Business Wire 2019.

PUB: 08/13/2019 10:00 AM/DISC: 08/13/2019 10:01 AM

Copyright Business Wire 2019.

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