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

Prices charged by LTL carriers have bounced up and down between 0.3% and 0.7% for five months in a row. By September, average LTL tags nationwide had increased another 0.3%, which left prices about where they’d been in April. Average prices for TL service, meanwhile, continued inching up. The rate of increase for TL tags has been so slow that by September prices stood only 1% higher than April levels. On the whole, with local trucking and specialized trucking factored in, average prices in the trucking industry increased by only 1.8% in the first nine months of 2007 from the same period a year ago. With a slowing economy, our forecasts of rate hikes under 1.5% for both LTL and TL remain in effect for 2008.

In September, prices for shipping cargo on scheduled flights flown by domestic airlines increased 0.2% from August. Looking at prices compared to the same month a year ago, air freight prices were up 1.6% in September, which followed a 1.5% year-ago price hike in August—the first back-to-back price hikes in over a year. By contrast, the air courier business has had no trouble stringing together price hikes. In September, domestic air courier tags increased 5.6% from 2006 levels and international air courier prices jumped 7.5% over the same period. These price increases were high, but not nearly as steep as September 2006’s year-ago gains of 10.5% and 17% for domestic and international, respectively.

Shippers who use the spot market to move freight over inland waterways probably wish they’d locked in their contracts back in May or April. The inland waterways shipping market had appeared to be moving back into balance after the hurricane disaster-induced price hikes of two years ago. Now things are out of whack again after two months of unexpectedly large price hikes. Prices charged for moving cargo on inland waterways increased 7.6% and 11.7%, respectively, in August and September from the same months a year ago. That September price hike was the first double-digit gain since December 2006. Alas, price increases like this are sinking not only our forecasts, but more significantly are sinking shippers’ budgets.

The rail industry pushed through a 0.9% price hike in September, but that increase would have been even higher if not for weakness in the intermodal market. According to surveys of U.S.-owned rail companies, transaction prices posted for intermodal service declined 1.2% from August to September while prices for carload service increased 1.3%. After factoring in passenger prices, overall rail prices were up 0.9%, as stated. Looking at price trends over the first nine months of the year, we see that carload prices are up 1.6% over the same period in 2006 and intermodal tags are up a slightly more vigorous 3.1%. The forecast continues to call for rail prices to be up around 1% in 2008.