CARRIER COSTS AND DEMANDS AFFECTING TRANSPORTATION SERVICE PRICES

By Staff -- Logistics Management, 10/1/2000

Boxes

Prices for corrugated and solid-fiber boxes were stable in the third quarter. Seasonal factors should push prices lower; thus, our fourth-quarter forecast has box prices falling by 1.26%. Prices will decline further as demand cools; we see box prices falling 4.80% in 2001. To bring inflation-adjusted industry margins in line with year-ago levels, prices would have to drop by 2.32%. To bring margins to their five-year norm, suppliers would have to cut prices by an average of 7.63%.

Fuel

Today's high fuel prices are expected to decline in 2001. Gasoline prices fell in August for the first time in months, with unleaded regular dropping 4.9%. Diesel fuel and #2 distillate, however, stung fuel buyers with respective price hikes of 4.7% and 3.6%. Our forecast shows average petroleum product prices slipping 1.62% in the final quarter of 2000. Next year, refining costs will drop 12.0%, which will lead to an 11.5% drop in petroleum prices.