Source: Elizabeth Baatz, Thinking Cap Solutions. E-mail: ebaatz@ice-alert.com

Local trucking companies cut prices 0.2% from June to July and reported a 1.1% price drop in ancillary services. Those cuts dominated the industry's price trends. The Bureau of Labor Statistic's index for all trucking services increased only 0.1% even as long-distance LTL rates increased 0.3% and TL prices grew 0.2% over the same June to July period. Annual price increases for local trucking were 6.6% in 2004 and 6.1% in 2005. Even with housing market jitters, the trend remains steady. Local truckers nationwide have raised average tags from year-ago levels by between 3.3% and 3.9% for five quarters in a row. In contrast, year-ago LTL prices have decelerated from 7.1% to 2.5% and TL from 3.9% to 1.9%.

Turbulence continues for shippers flying cargo on scheduled U.S. airlines. The 4.4% one-month price hike last May has held up with only a 0.8% price cut in June and a 0.1% increase in July. Meanwhile, air courier prices for both domestic and international service have increased for four consecutive months. Air freight prices are now up 20.8% relative to our 2001 benchmark year. That's down 2.1 points from 2006. Prices for domestic and international air courier service, however, are up 41% and 56.5%, respectively, from our 2001 benchmark year. These two prices are up 7.5 points and 10.8 points, respectively, from a year ago, which makes moving cargo on scheduled flights seem like a bargain.

Divergent price trends emerge for shipping cargo using U.S.-owned vessels. First, deep sea freight transportation prices plunged 2.8% in June and then recovered only 0.2% in July. Over April to July 2007, deep sea transport tags have fallen 2.3% from the same four months a year ago. Meanwhile, vessels running on the Great Lakes and St. Lawrence Seaway increased their average prices marginally in June and July. But because prices were low in 2006, these tags have grown at a sturdy 8.4% pace from April to July. Lastly, barges on inland waterways hiked their prices 6.2% in June and again 1.7% in July. Here, average prices have increased only 0.8% from April to July because hurricanes Katrina and Rita left price abnormally high in 2005 and 2006.

Looks like the rail industry took a rare break from pushing through price hikes in July. After four consecutive monthly price hikes in intermodal rail lines and three consecutive price increases in carload service, the Bureau of Labor Statistics says neither rail market registered any price changes in July. Despite that respite, looking at the entire 4-month period of April to July, intermodal remains the market to watch. Over April to July 2007, intermodal tags increased 2.5% from the same period a year earlier. Carload prices, however, were up just 0.54% over the same period. Nonetheless, intermodal and carload prices are moving at a much more moderate pace now compared to 2005 and 2006.