CARRIER COSTS AND DEMANDS AFFECTING TRANSPORTATION SERVICE PRICES

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

Wages

Despite all the reports that tight labor markets are driving up wages, we see little evidence of wage escalation run amok in the rail, water, and trucking industries. In fact, in the 12-month period ending with January 2000, average wages paid to workers in the rail industry fell 0.7% and wages in the domestic water transportation industry fell 2.4%. Carriers that ask shippers to pay higher rates in order to offset higher labor costs had better have a stronger case than this.

Industrial Trucks

Average prices of forklifts and other industrial trucks rose just 0.7% in the 12-month period ending with February 2000. But at the same time that prices were inching upward, the cost to manufacture forklift trucks was nosing downward. Demand for forklifts was especially strong in 1999, so producers were able to keep prices up. But now it looks as though demand for forklifts may be weakening and buyers may be gaining the upper hand.