Pricing across the transportation modes
By Elizabeth Baatz, Thinking Cap Solutions -- Logistics Management, 8/1/2006
% Change Vs.:
1 month ago
6 mos. ago
1 yr. ago
General freight - local
0.9
4.2
5.0
Truckload
0.6
2.4
4.3
Less-than-truckload
-1.0
4.1
6.8
Tanker & other specialized freight
0.2
1.4
5.0
TRUCK:
The Bureau of Labor Statistics’ survey of trucking companies shows that prices increased by a sedate 0.2% in June, a sharp slowdown from the aggressive 1.4% industrywide price hike seen in May. The force behind June’s slowdown came from long-distance LTL carriers of general freight as well as long-distance truckers that move specialized freight such as gasoline and frozen foods. Indeed, average transaction prices actually declined in June by 1% and 0.4%, respectively, for LTL and long-haul specialized carriers. Meanwhile, truckload haulers of general freight increased their prices by 0.6% from May to June. With second-quarter data now in the hopper, we see no reason to revise our aggregate trucking price forecast.
% Change Vs.:
1 month ago
6 mos. ago
1 yr. ago
Scheduled air freight
0.0
3.4
7.0
Chartered air freight & passenger
0.0
2.1
6.9
Domestic air courier
2.4
3.8
10.3
International air courier
3.1
3.1
17.2
AIR:
Our forecast for prices for flying freight on domestic airlines came in right on target because there was no change from May’s price levels. But thanks to April’s 2.4% rocket ride, the second quarter of 2006 did indeed register the largest price hike since mid-2003: up 7.5% from the second quarter of 2005 to the second quarter of 2006. This year-on-year trend will moderate in the third and fourth quarters to 5.4% and 5.3%, respectively. Meanwhile, air couriers are finding that aggressiveness suits them. Domestic and international air couriers hiked average prices by 2.4% and 3.1%, respectively, from May to June. Comparing the second quarter of 2006 to the same period a year earlier reveals respective 8.8% and 15.7% price hikes.
% Change Vs.:
1 month ago
6 mos. ago
1 yr. ago
Deep-sea freight
0.8
0.8
0.7
Coastal & intercoastal freight
2.9
3.6
10.1
Grt. Lks.-St. Lawrence Seaway
0.8
5.9
8.1
Inland water freight
2.6
1.4
24.0
WATER:
Price hikes for floating freight are still roiling shipping budgets. In June, average prices for all types of water transportation jumped 1.2% from the prior month and 5.3% from the same month a year ago. This time, however, the action was spread across all industry sectors. As expected, companies that haul freight on inland waterways continue to push the biggest price hikes. Here average tags in June were up 2.6% from a month earlier and 24% from a year ago. When you exclude towing, inland waterways prices were up an even sharper 2.9% and 27.4% for the same periods. Coastal and intercoastal carriers also hiked their prices by 2.9% from May 2006 and 10.1% from June 2005. Great Lakes vessel owners increased tags 0.8% and 8.1%.
% Change Vs.:
1 month ago
6 mos. ago
1 yr. ago
Rail freight
1.4
3.9
9.8
Intermodal
0.5
5.1
10.3
Carload
1.7
3.8
9.8
RAIL:
The “new normal” these days does indeed seem to be an inflationary scenario for shippers who rely on rail service. The latest Labor Department monthly survey shows that line-haul railroads increased average tags by 1.4% from May to June. Prices for carload rail service got back on the inflation track with a 1.7% price hike. Prices for intermodal service also grew 0.5%. Looking at price trends on a quarterly basis confirms this industry’s persistent inflation tendencies. In 2005, average rail tags saw quarterly inflation rates that were as low as 2% in the first quarter and as high as 4.7% in the final quarter. Comparing prices to the same period a year ago, we see tags ended the fourth quarter up 13.5%. Our forecast suggests that the year-on-year inflation rate will slow to 4% in the fourth quarter of this year.
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