NEWTON, Mass.— Shippers who responded to an exclusive Logistics Management reader survey said they foresee rate hikes averaging 4.5 percent across all modes this year. The survey was co-sponsored by DHL.

The majority—82 percent—of the 168 survey respondents reported that the prices they pay for logistics and transportation services had risen in the fourth quarter of 2004. Just 2 percent reported a decline in prices, and the remaining 16 percent said there had been no change. Those results are consistent with figures for the federal government's Producer Price Index (PPI), which reported price increases in most transportation modes toward the end of 2004.

The availability of freight and logistics services declined during the fourth quarter, according to half of the respondents. Just 14 percent reported improved availability, and the remaining 35 percent said they saw no change.

As for 2005, about one-third (31 percent) said they expect shipping capacity to improve in the first quarter. On the other hand, 39 percent anticipated that conditions will stay the same, while another 30 percent took a dim view and predicted that service availability will worsen.

When asked for their predictions regarding truckload rates, survey participants forecast a 4.6-percent increase on average. On the high end of the scale were 10 percent of respondents, who believe rates will climb by more than 8 percent. When it comes to less-than-truckload (LTL) transportation, the mean response was a 4.3-percent price hike.

Survey respondents said they expect to see a 4.6-percent rise in airfreight rates, a 3.9-percent jump in ocean shipping rates, and a 3.8-percent gain in express and parcel rates.

Those projections for the most part echo the pace of PPI rate increases over the last 12 months. Shippers do, though, expect airfreight rates in 2005 to rise more quickly than the pace recorded in the PPI for the past 12 months. Nevertheless, they forecast express and standard package rates to rise more slowly than has been the case in the last year.

Most respondents laid the blame for higher rates on the surge in fuel prices. When asked which factor was most responsible for higher rates in 2004, 52 percent of those surveyed cited higher fuel costs. Another 32 percent, however, said the culprit was insufficient carrier capacity. In addition, 13 percent said increases in carriers' costs, such as wages and insurance, were the most important factors driving freight rates higher. Just 3 percent blamed carriers' higher profit margins.

Are shippers' forecasts realistic? To find out where economists and industry analysts predict rates are headed, turn to our cover story, "Rate Outlook: The Money Pit," on Page 38 in this issue.

To view the complete results of this survey, click here.