According to surveys of motor carriers, prices for truckload service aren't moving much, but watch out if you're in the less-than-truckload market. In January 2003, TL prices stood unchanged from the previous month and were up just 1.4% compared to a year earlier. LTL prices, by contrast, jumped 5.5% in that same year-over-year period. Looking ahead, LTL prices appear poised to ride a cyclical upward trend. Rising gasoline prices will likely provide the fuel for an inflationary ride. The last time we saw a significant bump in fuel costs (in mid-2001), average LTL prices rose at a rate of 7-plus percent. This time around shouldn't be as bad.

Average prices for rail freight inched up just 0.1% from December 2002 to January 2003. Not every shipper got as much of a break: prices for intermodal transportation during that same period increased by 1%. For non-intermodal business, shippers of metal ores faced the biggest price challenge as average prices for hauling those commodities jumped 4.5%. Compared to a year ago, prices for hauling metal ores are up 2%. In January 2003, prices for shipping processed primary metals, meanwhile, rose 3.2% compared to January 2002.

"Rough seas" may be the catch phrase for shippers of containerized cargo. Almost across the board, the U.S. Labor Department price indices showed January 2003 prices that were dramatically higher than they were a year ago . Average prices for inbound deep-sea foreign trade rose 32.9%. Prices for deep-sea domestic transportation likewise increased, but at a more modest 6.8% rate. Even Mississippi River barges got into the act, with prices up 5.9%. Some of this activity may be intended to push through higher prices before a possible U.S. war in Iraq.

Shipping via U.S. airlines got a tad less expensive as average prices for shipments on scheduled flights slipped 1.4% from December 2002 to January 2003. Compared to a year earlier, though, prices are still up by 6.7%. The problem for all air carriers, including dedicated air cargo companies, of course, is that fuel costs are eating into already thin or nonexistent margins. Indeed, in January 2003, the price for fueling services at domestic airports rose 5.8% from the previous month and was up 7.7% compared to the same month a year ago. This kind of cost pressure means shippers can expect higher prices in the months ahead.

Fuel Prices

At press time, the U.S. average retail price of gasoline stood at $1.70 per gallon, making the Department of Energy's forecast for gasoline prices to peak at $1.66 by spring hopelessly out of date. There already have been reports of gas prices above $2 a gallon in some cities, even before a bomb drops in Iraq. American refiners have been keeping inventories low to minimize the impact of higher crude costs, so it remains to be seen how possible war-related supply disruptions will impact the price of crude.

Wages

If your carrier says labor costs are up, you can believe it. Drivers and other trucking company laborers scored a 2.3% wage hike in 2002, up to an hourly average of $14.44 in December. Water transportation saw hourly wages rise by 6.9% to $24.32, while warehouse workers enjoyed a 5.3% increase to $13.76 per hour. Third parties, which rely on more technically savvy workers, saw wage inflation slow from 9.4% in 2001 to 4.6% in 2002. The average wage in that industry segment is now $17.26 an hour.