Recent Price Trends in Transportation Services

By Staff -- Logistics Management, 4/1/2000

Trucking

Less-than-truckload (LTL) shipping rates in February 2000 rose 0.8% from January levels and an impressive 5.2% above February 1999 levels, according to the Bureau of Labor Statistics. Yet the escalation rate in intercity LTL rates has actually slowed a bit recently: In the 12-month period ending with June 1999, LTL rates rose nearly 8.0%. But in the 12-month period ending with February 2000, escalation in LTL rates moderated to 6.2%. Although we thought LTL escalation would have slowed a bit more by now, our forecasts are pointed in the right direction.

Water

The latest surveys show that average prices for moving inbound freight via foreign deep-sea cargo carriers took off again in February 2000-rising 3.7% above January 2000 levels and coming in 67.0% higher than year-earlier levels. Domestic deep-sea cargo carrier rates, meanwhile, also jumped 2.6% between January and February 2000 and are up 5.1% from year-ago levels. These February hikes were a bit stronger than expected and caused us to raise our near-term forecasts. Water transportation rates as a whole will likely increase in both 2000 and 2001.

Rail

Following a 0.6% average price hike in January, rail freight rates fell 0.2% in February. Intermodal rates did not budge; the decline came in rates for what the Bureau of Labor Statistics calls "nontrailer on flatcar" services. Commodities that saw the biggest rate drops were primary metals and stone, clay, and glass products. Rates for hauling metals fell 1.6% between January and February. Rates for shipping stone, clay, and glass fell 1.9%. But compared with prices recorded one year ago, rail rates for these two categories actually rose 3.8% and 5.8%, respectively.

Air

Rates for shipping cargo via scheduled airline flights held steady from January to February 2000. But aircargo rates are up 1.3% over year-ago levels. Domestic air-courier services, meanwhile, also held their rates steady between January and February, but prices are up 5.4% over last year's levels. This price information is gathered by the Bureau of Labor Statistics and is supposed to include any discounts or special deals. Whether or not fuel surcharges and other factors that pad rates are being picked up is unclear. With jet-fuel prices soaring and air shipping rates on the ground, margins in the air transportation industry are probably being squeezed.