CARRIER COSTS AND DEMANDS AFFECTING TRANSPORTATION SERVICE PRICES

By Staff -- Logistics Management, 8/1/2000

Warehousing and Storage

Price inflation for public warehousing services settled down in the first half of 2000. In contrast with all four quarters of 1999, when inflation ran in the 2.7% to 3.2% range, average prices for warehousing farm products dropped 1.4% and for refrigerated products 0.1% in June 2000. Only prices for warehousing general merchandise showed a small hike (0.3%). Dot-com fever apparently hasn't had much effect on the general merchandise warehousing industry yet.

Freight Forwarding

Hourly wages in the freight-forwarding industry continue to soar. In May 2000, wages climbed to $14.71, up 6.1% from year-ago levels. Forwarders appear to be responding by raising their rates: Average service prices in the final quarter of 1999 and first two quarters of 2000 rose 1.1% per quarter from year-ago levels. That's a sharp turnaround from the 3.0% to 4.0% quarterly price drops recorded in late 1997 and the first half of 1998.