Pricing Across the Transportation Modes

By Elizabeth Baatz, Thinking Cap Solutions

By Elizabeth Baatz, Thinking Cap Solutions -- Logistics Management, 10/1/2005

TRUCK

Trucking companies did not tack on noticeable increases to existing fuel surcharges in August, according to the Labor Department’s survey of U.S. carriers. From July to August the average transaction price charged by truckload carriers increased only 0.1% and those for LTL fell 0.3%. From August 2004, however, TL and LTL prices are up 5.6% and 8.4%, respectively. But, that’s a far cry from the 48% surge in gasoline tags over that same time period. When the September and October trucking price data are reported, we expect any restraint regarding fuel surcharges will melt away. Our most up-to-date forecasts show average trucking prices increasing from 2004 by 5.4% in the third quarter and 5.7% in the final quarter of 2005.

% CHANGE VS.:	1 month ago	6 mos. ago	1 yr. ago
General freight - local	-0.1	1.7	6.0
Truckload	0.1	1.4	5.2
Less-than-truckload	-0.3	4.6	8.1
Tanker & other specialized freight	0.1	1.7	3.5

AIR

With Gulf Coast refineries recovering, our price forecast for U.S. airlines that ship freight on scheduled flights has been upgraded because of the ever-rising cost of jet fuel. On the heels of a 3.5% price hike in July (even before the hurricanes hit) the average price for airfreight service increased by 4.1% in August compared to the same month last year. Assuming a 4.3% jump in September, the airfreight price index will be up 3.9% in the third quarter, followed by a 5.3% hike in the fourth quarter of 2005. These numbers are significantly higher than our previous Q3 and Q4 forecasts of 2.6% and 3.4%. Air courier companies, meanwhile, also are grappling with higher fuel prices. But with a price war between FedEx and UPS apparently averted, firming prices in that industry can now take hold.

% CHANGE VS.:	1 month ago	6 mos. ago	1 yr. ago
Scheduled air freight	0.6	3.6	4.1
Chartered air freight & passenger	1.3	1.5	5.4
Domestic air courier	1.0	1.8	8.6
International air courier	1.5	3.0	9.4

WATER

Prices for hauling oil and grain on the Mississippi and other inland waterways had been drifting along a budget-busting trend line even before Katrina hit New Orleans. The most recent data tells the story. In August 2005 the average price for moving freight on inland waterways increased 2.7% from the previous month. The seventh price hike in the last eight months, it stranded prices 13.9% above year-ago levels. At the same time, from August 2004 to August 2005, average prices for the Great Lakes-St. Lawrence Seaway increased 4.1%, but deep-sea shipping inched up just 0.4%. With shipping companies repairing their assets after the hurricane, we have raised our total water transportation price forecast to 4.5% in 2005 and 6.5% in 2006.

% CHANGE VS.:	1 month ago	6 mos. ago	1 yr. ago
Deep-sea freight	-0.8	-1.4	0.4
Coastal & intercoastal freight	1.0	7.6	12.3
Grt. Lks.-St. Lawrence Seaway	0.1	2.7	4.1
Inland water freight	3.6	5.2	14.8