Market Watch

By Staff -- Logistics Management, 1/1/2001

Trucking

The collapse of several prominent dot-coms may mean fewer packages are being shipped on the nation's highways, but prices for trucking services definitely do not show signs of falling. In November 2000, LTL rates rose 9.9% over year-ago levels, while truckload rates increased 3.9%. In the final quarter of 2000, we estimate rates for trucking services rose at a strong 5.4% rate over year-ago levels. As a result, our revised forecast for 2001 takes off from a higher starting point, calling for trucking prices to rise at a 4.2% year-ago pace by June 2001.

Water

Average prices for transporting freight over water continue to swell. In the final quarter of 2000, we estimate that average rates for water transport increased 9.3% over year-earlier levels. Prices for inbound foreign deep-sea freight transportation continued to rise at the fastest clip. In November, these rates rose 4.9% from October levels and 27.9% over November 1999 levels. By contrast, rates for domestic deep-sea transportation increased only 4.9% between November 1999 and November 2000. Our forecast calls for water rates to rise 1.7% in 2001.

Rail

Rates for shipping freight via rail fell only 0.1% between October 2000 and November 2000. A slowing economy forced rail rates for shipping transportation equipment down 1.2% between October and November. Nonetheless, because their competitors in other modes continue to raise rates, the railroads will almost certainly continue their push to increase prices into the first quarter of 2001. The revised outlook now calls for average prices for rail transportation to rise another 0.5% in the final three months of 2001.

Air

Shippers that move cargo via air carriers encountered some sticker shock recently. In November 2000, average prices for shipping air cargo on scheduled flights rose 8.1% from October 2000 levels and 8.5% from November 1999 levels. That was the biggest single monthly price hike recorded in the past seven years. No doubt, the soaring cost of jet fuel accounts for the higher aircargo rates. We now forecast that after increasing 5.1% from year-ago levels in the final quarter of 2000, average aircargo rates will come back to earth with a 5.0% decline in the final quarter of 2001.