Hub Forecasts Rising Intermodal Rates

Intermodal marketer Hub Group expects overall U.S. intermodal pricing this year to rise 3 to 5 percent, driven by railroad charges, while long-haul trucking rates increase in the high single digits.

Mark Yeager, Hub’s vice chairman and chief operating officer, gave those projections at a J.P. Morgan investors’ conference Wednesday.

“We think that the over-the-road pricing market is certainly poised for some significant increases” in 2011, Yeager said. “It’s likely to be a pretty volatile pricing market.” He estimated rates will see “probably high-single (digit) increases in the truck market.”

By The Numbers: U.S. IMC Intermodal & Highway Yields

But “intermodal pricing does not tend to be nearly as volatile as the truck pricing,” he said. “There have been some increases announced by the rails that are effective this spring; we’re going to have to go out and pass those increases along to our customers. It’s been a strong demand environment for the intermodal product this year, so we think those increases are probably going to stick.”

Yeager estimates that “on the intermodal side we’re likely to see 3 to 5 percent aggregate increases, not nearly as much as the truck market but certainly fairly significant.”

-- Contact John D. Boyd at jboyd@joc.com.