Average prices charged by U.S. trucking companies increased 0.5% from February to March 2006. That was the largest one-month price hike since October 2005, when prices increased 1.3%. The source for this March madness was the long-distance less-than-truckload carriers, which increased their prices an average of 0.6%. Meanwhile, prices charged by truckload carriers held steady, and those for specialized freight services inched up 0.1%. Compared to year-ago price levels, LTL led the pack with a 6.4% price gain. With the first quarter of 2006 complete, we now are forecasting average prices for all types of trucking services to gain 4.9% in the second quarter, 4.5% in the third quarter, and 4.0% in the fourth quarter.

After flying a turbulent, up-and-down route from 2002 to 2004, transaction prices in the domestic airline industry appear to be steadily ascending now. From March 2005 to March 2006, shippers paid 6.3% more to fly their cargo on scheduled flights and approximately 6.0% more to ship on chartered flights. At the same time, the air courier business has also been reaching new pricing heights. Domestic air courier prices increased 8.6%, while international air courier tags jumped a strong 16.2%. With few signs of a slowdown, we are currently forecasting that prices on domestic airlines will grow at least 5.4% in 2006, but even that may underestimate the upward pressures on air cargo pricing.

Deep-sea carriers shouldered the majority of the blame for the last big surge of inflation in 2003-2004. In the first quarter of 2004, for example, prices for deep-sea transportation jumped 11.3% from year-earlier levels. In the first quarter of 2006, deep-sea prices were up a mere 0.5% from year-ago price levels, but tags for shipping on the Great Lakes were up 5.7% and inland waterways pricing shot up 19.3%. Looking at our total water-transportation price index, the upward push from inland waterways will largely offset the decline in deep-sea pricing. Thus, after a 5.1% price hike in 2005, we expect a 4.0% gain in 2006.

Rail transportation companies wielded their pricing power again in March by hiking average transaction prices for bulk railcar shipments by 1.6%. That increase more than offset the previous two months of price declines, to leave carload rail prices standing 31.0% higher than they were five years ago. For the entire first quarter of 2006, prices for carload services were 11.3% higher than they were a year earlier. In contrast, intermodal service prices were 13.1% higher than they were in 2001, and in the first quarter of 2006 they were up 8.4% from a year ago. Looking at the year ahead, a continued focus on cost controls, more rationalizing of rail capacity, and another 8.1% price hike in 2006 means that shippers will remain under extreme pressure to sign favorable transportation contracts.