Market Watch
By Staff -- Logistics Management, 8/1/2000
Trucking
In June, prices for shipping general freight via less-than-truckload (LTL) carriers jumped a strong 0.6% from May levels. Users of trucking and courier services have become quite accustomed to such hikes. In the first two quarters of 2000, average prices for the entire industry jumped 3.0% and 4.0% from levels reported in the first and second quarters of 1999, respectively. When will it stop? Much depends on what happens with gasoline prices and with the U.S. economy, but we hazard a guess that 2001 will see some slowing in truck rate inflation.
% CHANGE VS.: 1 month ago 6 mos. ago 1 yr. ago Less-than-truckload +0.6 +3.5 +6.4 Truckload -0.1 +2.2 +2.4 Agricultural - not local +1.3 +3.7 +4.8 General freight - local +0.7 +2.2 +1.5 Agricultural - local 0.0 +1.7 +1.7 |
Water
Some of the biggest price hikes in the transportation sector continue to bedevil ocean shippers. Surveys conducted by the Bureau of Labor Statistics show that in June 2000, average prices for the inbound deep-sea foreign transportation of freight rose 9.9% from May 2000 levels and 15.1% from June 1999 levels and that average prices in the first quarter of 2000 rose 10.3% over year-ago rates. Nonetheless, our forecast for all-water transportation rates calls for inflation to slow down considerably. We forecast average prices will fall 2.8% in 2001.
% CHANGE VS.: 1 month ago 6 mos. ago 1 yr. ago Inbound liner +9.9 +17.1 +15.1 Outbound liner +5.6 +6.6 -1.1 Domestic deep sea -0.2 +3.8 +4.4 Grt. Lks.-St Lawrence -0.2 -0.1 -0.1 Mississippi River +0.6 +0.9 +5.8 |
Rail
Average rail transportation rates rose 0.3% between May and June. Prices for shipping via trailers on flatcars held firm in June, while non-intermodal rail prices rose 0.5%. By the end of the second quarter of 2000, all rail rates were up 1.4% from year-ago levels. That's the highest quarterly inflation gain for rail transportation since the second quarter of 1998. The forecast, meanwhile, calls for railroads to increase average prices by another 2.0% over year-ago levels in the final quarter of 2000. Inflation rates for rail service are expected to peak in early 2001.
% CHANGE VS.: 1 month ago 6 mos. ago 1 yr. ago Coal/Petroleum 0.0 +0.9 +0.9 Chemicals +2.5 +2.9 +3.4 Farm products 0.0 -0.9 +0.5 Motor vehicles 0.0 -0.1 -0.4 Metallic ores 0.0 +4.8 +1.9 |
Air
Data for air transportation services showed no changes between May and June 2000, but that doesn't mean inflation has stalled. In the second quarter of 2000, our index of air transportation prices rose 1.2% from year-ago levels. Our forecast projects that prices will be up by another 1.4% from year-ago levels in the third quarter of 2000 and will rise 0.4% to 0.6% in each of the next three quarters. The pricing strength that airlines currently enjoy comes from a strong and steady U.S. economy. If interest rate hikes by the Federal Reserve slow the economy to a soft landing, then shippers can expect a slowing of airfreight and air-courier inflation as well.
% CHANGE VS.: 1 month ago 6 mos. ago 1 yr. ago Scheduled air cargo (property) 0.0 -0.2 +1.4 Domestic air courier 0.0 +10.3 +14.3 International air courier 0.0 +4.7 +4.7 |
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