Logistics Price Trends

Pricing Across the Transportation Modes

By Elizabeth Baatz, Thinking Cap Solutions -- Logistics Management, 1/1/2007

Trucking
Falling for the second consecutive month, average prices charged by the U.S. trucking industry dropped 0.1% from October to November 2006. This price weakness came from a slight dip of 0.08% in rates charged by intercity truckload carriers of general freight. LTL carriers, on the other hand, propped up their prices by 0.2%. Other segments also bowed to market pressure and reduced their prices. Overall, truckers that carried specialized freight in tankers and other product-specific vehicles cut their average prices by 0.4%. That's because long-distance specialized freight carriers cut their average prices by 0.5%, while specialized carriers that serve local markets raised their prices by 0.4%.

Logistics managers who shipped on scheduled U.S. flights saw average prices rise by 0.4% from October to November. Compared to a year earlier, prices were down 0.9%. In sharp contrast, prices charged by carriers that operate charter or non-scheduled flights for both cargo and passengers increased 0.5% in November 2006 from the month before and were up 7.8% from November 2005. Other fees charged by charter operators also soared, up 8.6% from one month and up 15.3% from a year ago, respectively. These price spikes stood out as companies that charge for fuel services slashed their prices by an encouraging 9.7% from a month ago and 14.7% from a year ago.

U.S.-based water carriers cut their average prices by 1.5% from October to November 2006. That price cut was led by companies that specialize in shipping on inland waterways, where prices dropped 5.4%. Deep-sea ocean carriers that report their price data to the U.S. Bureau of Labor Statistics registered a 1.1% one-month price decline. Coastal and intercoastal carriers, meanwhile, dropped their average prices by 0.6%. These numbers, however, haven't reversed the longer-run situation yet. Shippers who rely on barges for inland waterway transportation are still paying 16.6% more now than they paid in November 2005, and they are shelling out 51.3% more today than they paid on average in 2001.

Thanks to rising costs and continued growth in intermodal traffic moving through West Coast ports, railroads may be holding the upper hand at the negotiating table, but prices reported to the Bureau of Labor Statistics in November did not reflect this. In November, average prices charged for intermodal service dropped 1.6% from October. Prices for carload service likewise declined, by 2.2%. In the carload market, that price drop sent tags back to June 2006 levels, essentially wiping out the price hikes that shippers paid in September and October. The underlying factors driving rail price trends, however, haven't changed. Shippers continue to pay about 35% more now for carload service than they paid on average in 2001.

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