Pricing Across Transportation Modes - January 2011

Trucking
In November, TL prices increased 1.3% from the prior month as LTL prices also gained 2.2%. The rollercoaster ride that sent trucking prices up an unprecedented 11.1% from the first quarter of 2007 to third quarter 2008 only to be followed by a 7.6% price plunge to the second quarter of 2009 appears now as an anomaly for the record books. Over the past six quarters, aggregate trucking industry prices again have bounced around on a calm upward-trending trajectory, mirroring prior 2002-2006 trends. By the time December data rolls in, we expect trucking industry prices will have increased 1.7% in 2010. Our forecast for aggregate trucking industry prices shows a 2.8% gain in 2011.

Air
Prices for flying freight in the belly of scheduled flights flown by U.S.-owned airlines also rode a rollercoaster ride, up 26.4% from the first quarter of 2007 to third quarter 2008 and down 13.2% by the third quarter of 2009. By the third quarter of 2010, prices for airfreight on scheduled flights had almost completely regained its losses by flying 11.5% above its 2008 price trough. With 11 out of 12 months of data reported for 2010, it looks like the industry will be reporting an 8.7% annual price hike for the entire year followed by a 2.2% price hike in 2011. Prices for flying freight on chartered planes (again U.S.-owned planes only) appears headed for an 8.9% annual increase in 2010.

Water
U.S.-owned vessels hauling freight over water likewise fell victim to volatile fuel costs and exceptional price swings. Here prices soared 19.8% to a peak price set in the third quarter of 2008 and then fell 15.2% to a low point in the second quarter of 2009. Since then, average prices in the water transportation service industry have regained 14.5% and seem poised to continue on a more traditional and predictable inflationary path. Inland waterways carriers displayed price volatility in November as their prices (excluding towing) fell 10.7%. In the aggregate, however, water transportation prices will end up with a 7.8% price hike in 2010 followed by a 4.7% increase in 2011.

Rail
Rail operators reported transaction prices soared 20.1% from the first quarter of 2007 to a peak in the third quarter of 2008. Yet the rail industry's peak-to-trough price decline was a relatively modest 10.5% and by the third quarter of 2010, average rail transportation prices stood only 3.9% below those peak price levels that made the record books a mere eight quarters earlier. Our forecast shows a steady upward trajectory for rail prices ahead, and by the end of 2011, rail prices will be setting a new peak. After a 5.1% annual price increase in 2010, we forecast a 3.5% annual increase in 2011. Looked at another way, the final quarter of 2011 will register a 4% price increase from the final quarter of 2010.