Large retailers may be winning price concessions in their LTL bids, but overall trends show the LTL industry as a whole continues to eke out price hikes. In the final quarter of 2007, average LTL prices increased 4.6% from Q4 of 2006 . With preliminary data in, the industry logged a 2.9% annual price increase in 2007. Prices will bounce around over the next four quarters, but we still forecast that the LTL industry will register another 2.1% annual price hike in 2008. As for TL, in the final quarter of 2007 prices moved up 1.4% from the third quarter and up 2% from Q4 of 2006. TL carriers will have a hard time getting traction for higher prices in 2008, but a final push at the end of the year will yield a 1.5% price increase.

In the second highest monthly price hike of the year, domestic air courier companies raised prices 5.4% in December 2007. For the entire fourth quarter of 2007, domestic air courier tags were up 11.9% from a year earlier as international air courier prices likewise increased 12.1% over the same time period. Fuel surcharges, which are incorporated into these price escalation estimates by the survey respondents, account for a significant portion of the air transportation industry’s inflation trends. In contrast, shippers who flew freight on scheduled U.S. airline flights saw average prices increase only 4.2% from a year ago in the final quarter of 2007. In 2008, these prices are forecast to rise 1.6%.

North American water transportation freight rates ended the year with a bang. In December 2007, coastal and intercoastal freight transportation prices increased 7.9% from the same month a year ago. At the same time, Great Lakes-St. Lawrence Seaway freight transportation tags jumped 14% while inland water freight prices fell 0.3%. That price cut, however, was a continued correction from unusually high prices after Hurricanes Katrina and Rita. Compared to prices offered in December 2003, prices for coastal-intercoastal service are up 35.4%, Great Lakes-St. Lawrence are up 31.3%, and inland waterways are up 45.5%. All told, including deep sea transit, U.S.-owned barges and ships will push a 1.1% annual price increase in 2008, following a 1.8% hike in 2007.

Intermodel rail carriers surveyed by the U.S. Labor Department say their average transaction prices jumped a whopping 5.1% from November to December 2007. That was by far the largest one-month price hike on record. Carload prices also increased, but by a more modest 1.3%. More significantly, in December 2007 prices for intermodal and carload were up a respective 12.5% and 9.4% from the same month a year ago. With a weaker economy, the rail industry could be forced to implement a corrective price cut in the first quarter of 2008 (or the data will be revised downward by the surveying agency). Average intermodal rail prices increased at a 4.4% annual rate in 2007 and are forecast to slow to 2.5% in 2008.