The inflation rate for trucking slowed a bit in July. A government survey of TL and LTL truckers shows both markets hiked prices only 0.6% in July. Long-distance specialized freight haulers increased their average prices 0.7% and local truckers of general freight actually cut their price tags 1.4%. This moderation in the inflation trend will not last as long as underlying costs, most notably diesel fuel, continue to push trucker margins down to dangerous levels. Indeed, retail diesel stations increased their prices by an average 19% from June to July. Our forecast for overall trucking shows the annual inflation rate at 8.9% in 2008 and 5.2% in 2009. That’s up from our previous 7.7% and 4.1% forecast.

Bureau of Labor Statistics’ surveys just began reporting a break down of price data for air freight flown on unscheduled (chartered) flights. Now we finally have a way to get a better look at air charter prices. According to the just released survey, U.S.-owned air charter companies increased their air freight fees by 5.6% for domestic service and 6.4% for international service. June 2008 was the first month for which this data has been released. We will build a bridge to the old-time series in which passenger and freight were combined and as time goes on, we will be able to forecast and analyze this market. Meanwhile, airlines flying freight on scheduled flights cut their prices 5% from June to July.

Prices for moving cargo over water are under the same inflationary burden. After a troubling 3.8% price hike in June, average prices for water transportation service overall increased another 1.8% in July. The biggest price booster came from the inland waterways market. Here, prices jumped 5.5% in June and 3.4% in July. Compared to the same month a year ago, barge companies and others who move freight on inland waterways had increased their prices by a whopping 25.6% in June and 23.3% in July. It’s dreadful to have to keep raising our forecasts, but we did this with a new annual inflation rate of 11% in 2008 and 6% in 2009, up from 7.7% and 3.3%, previously.

The intermodal rail industry took a much needed breather in July by cutting average prices 1.8%. But after rising by 4.6%, 2% and 5.6% over the previous three months, a measly 1.8% price cut really didn’t do too much to reduce the pain of 2008’s inflation ride. Furthermore, in the carload segment of the rail freight transportation market, prices in July continued to increase, up 1.4%. Looking at the entire rail transport industry, average prices in July were up 1.1% from a month ago and 14.8% from the same month a year ago. As with so many others, our forecasts for rail prices have been revised upward again to an annual inflation rate of 12.8% in 2008 and 7.6% in 2009. That’s up from our previous 11.5% and 3.6% forecast.