Trucking companies faced a somewhat deflationary pricing environment in May. That month, the general metric for trucking and land courier services declined by 0.2% from price levels for the previous month. When we compare those numbers to prices from a year ago, though, we see an average increase of 2.7%. The 12-month moving trend shows averages for all motor carrier categories following a steady 2% escalation path. Less-than-truckload prices are leading that trend with a 12-month 5.6% escalation rate (borne out by recently announced general rate increases) while TL is trending at just 0.7%.

So much for calm waters in our water transportation forecasts. In May 2003, the aggregate metric for water transportation registered a 5.6% price hike from the previous month. That was the largest one-month price increase since May 1999. The culprit? You guessed it: inbound liner shipping. After behaving fairly well recently, average prices for inbound ocean liner service in May jumped 17.9% compared to the previous month and 37.6% from the same month a year ago. Outbound liner prices actually fell 0.1% from April to May.

Transportation buyers caught a break in the rail market in May. Powered by a 0.7% decline in freight rates, prices slipped across the board. Primary metals, up 0.7%, was the only commodity to register a one-month price hike. But when we compare recent prices to those of a year ago, May flowers look more like April showers. That's because prices are still higher than they were a year ago. Rates for chemicals and coal are modestly higher, but shippers now pay 5% more for hauling farm products and 4% more for motor vehicles.

Prices for transporting cargo on scheduled domestic airlines increased 1.4% from April to May, but hiding behind that number were two very distinct trends. Shippers of general cargo enjoyed a 0.2% one-month price decline, but shippers that move large quantities of mail saw prices soar 9% over that same period. Looking at prices levels in May 2003 and comparing them to those of a year ago, we see that prices for shipping property are up 7.4% and prices for mail rose 12.5%. Meanwhile, air courier rates were up 4.8% from a year ago for domestic service and 7% for international carriers.

PETROLEUM

Refined petroleum prices are following a downward path these days. In May, average prices for those products plunged 7.4% from April's levels. Gasoline tags were down 6%, jet fuel fell 9.4%, and residual fuel was down 9.4%. That may not last long, though. Although low margins after a spike in crude oil costs is a typical trend, since October 2002, producers have failed to fully pass along their higher costs to customers. As a result, current refined petroleum prices are at least 3.2% below the level necessary to generate fair margins.

BOXES

Average prices for corrugated and solid fiber boxes continued to slide in May, falling 0.05%. Add to that an uptick in production costs, and box producers have seen five cents chipped from their inflation-adjusted margins for every $100 of product sold. Over the last seven months, margins have fallen $1.07. Still, they remain slightly higher than the five-year average. Although it's a buyer's market for boxes, getting price concessions will be tough until box sales show stronger signs of recovery.