Price Trends
Pricing Across the Transportation Modes
Elizabeth Baatz -- Logistics Management, 3/1/2009
Source: Elizabeth Baatz, Thinking Cap Solutions. E-mail: ebaatz@alertdata.com
Trucking
Despite a big drop in truck tonnage last December, LTL trucking companies say they increased average transaction prices in January 2009 up 8.1% from a month ago and up 4.9% from the same month a year ago. If that hike holds, then it will have wiped out all the LTL price cuts reported in the last quarter of 2008. Demand for transportation services will likely continue to fall through at least Q3 of 2009, so we forecast LTL prices to drop again in the second and third quarters of 2009, although not nearly as sharply as in August-to-December last year. By the end of 2009, prices in both the LTL and TL industries will end up returning to levels last seen at the end of 2007, before fuel surcharges went haywire.
| % CHANGE VS.: | 1 month ago | 6 mos. ago | 1 yr. ago |
| General freight - local | 0.5 | -8.8 | -2.2 |
| Truckload | -2.0 | -9.8 | -3.7 |
| Less-than-truckload | 8.1 | -0.9 | 4.9 |
| Tanker & other specialized freight | -2.1 | -5.6 | -0.6 |
Air
Following a 3.1% monthly price cut in December 2008, U.S.-based airline companies propped up their transaction price for hauling freight on scheduled flights with a 0.2% price increase in January 2009. It helped, no doubt, that at the same time air charter companies increased their prices 3.4% for flying cargo on unscheduled flights. North American demand for air freight service, however, reportedly has fallen more quickly and more deeply than any other mode in this emerging recession. Following 2008's sky-high 17.9% price hike, our current forecast shows average airfreight prices on scheduled domestic airline flights declining only 0.4% in 2009. That number probably won't remain airborne for long.
| % CHANGE VS.: | 1 month ago | 6 mos. ago | 1 yr. ago |
| Scheduled air freight | 0.2 | -3.9 | 12.7 |
| Chartered air freight & passenger | 3.4 | NA | NA |
| Domestic air courier | 0.1 | -14.4 | -3.5 |
| International air courier | 1.8 | -12.4 | -1.7 |
Water
Thanks to the global recession, international containership base rates reportedly are so low now that some shippers are paying only for fuel and handling. Surveys of companies that ship on U.S. waterways, however, show some carriers still enjoy pricing power. In January 2009, prices for inland waterways freight transport (excluding towing) jumped 9.8% from the prior month and were up a whopping 17.4% from same month a year ago. With no sign of a cyclical peak yet in this market, nonetheless our inland waterways freight forecast shows prices declining modestly over the first three quarters of 2009, before stabilizing in the final quarter.
| % CHANGE VS.: | 1 month ago | 6 mos. ago | 1 yr. ago |
| Deep-sea freight | -7.4 | -9.4 | 8.9 |
| Coastal & intercoastal freight | -0.1 | -3.3 | -1.0 |
| Grt. Lks.-St. Lawrence Seaway | 3.3 | 0.8 | 6.1 |
| Inland water freight | 7.1 | 0.1 | 14.9 |
Rail
The rail freight industry hasn't been immune from feeling the effects of recession either, despite its relatively strong financial position. In January 2009, intermodal rail freight prices declined for the fifth month in a row, ending up back at price levels last seen in the summer of 2007. Intermodal rail tags increased 13.7% in 2008 and are forecast to decline 13% in 2009. The same pattern holds for carload rail service as well where prices also have fallen for five consecutive months. Average transaction prices for carload freight shipping grew 11.8% in 2008 and are forecast to fall 7% in 2009. Overall, our rail freight price forecasts continue to be revised downward again.
| % CHANGE VS.: | 1 month ago | 6 mos. ago | 1 yr. ago |
| Rail freight | -4.3 | -10.0 | -2.8 |
| Intermodal | -4.5 | -17.6 | -6.6 |
| Carload | -4.4 | -9.3 | -2.4 |
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