Transportation pricing trends - August 2011


By ·





 

Trucking
Buyers of LTL services have been hot under the collar even without a summer heat wave. Why so steamed? Because in July 2011, shippers saw average LTL prices surge 10.4% above year ago levels. That was the single largest such price hike since the
Labor Department began reporting these prices in 1992. LTL tags are forecast to increase 8.2% in 2011. Justifying all price hikes, the trucking industry's costs (excluding labor) shot up 8.3% in the year-over-year period ending May 2011. Cost escalation to operate trucking companies is accelerating, with only one speed bump in the offing—a possible double-dip recession. Our aggregate trucking price forecast stands unchanged, up






 

Air
Drewry Shipping Consultants' international air freight price index has registered year-over-year declines for seven straight months, but prices for flying freight in the belly of U.S-owned planes on scheduled flights has flown in the opposite direction. In June 2011, this U.S. air cargo price index registered its third month in a row of year-ago gains exceeding 11%. From 2001 to June 2011, our airfreight price index increased 60.6%. That's about on par with the airline industry's 58.4% escalation rate in total costs that took place over the same ten-year period. (Our 10-year cost analysis includes a 344% increase in fuel cost escalation.)
For all of 2011, our air cargo price index will be up 9.3%.






 

Water
U.S.-owned barges and cargo vessels on inland waterways, excluding towboats, boosted their average transaction prices by 3.3% from May to June. Ships on the Great Lakes/St. Lawrence seaway as well as domestic deep-sea freight carriers also hiked prices 4.6% and 2.1%, respectively. Looking at year-over-year escalation rates, the three respective inflation numbers entered the books at 18.6%, 13.1%, and 9.4%. Unlike trucking and airfreight, the U.S. waterborne freight industry continues to beat the underlying cost inflation devils. Year-overyear cost escalation in this industry increased only 2.8% in May 2011. The U.S. water transportation industry's price escalation forecast remains 6% in 2011 and 3% in 2012.






 

Rail
Intermodal rail operators reported average transaction prices dropped an unexpected 1.2% from May to June 2011. Nonetheless, year-over-year intermodal tags have increased for 11 consecutive months, ending June at 7.6%. Also escalating for seven months in a row, carload prices were up 6.4% in the 12-months ending June. For every $100 of rail services sold, ALERTdata analysis shows the rail industry spends $13.38 on a budget category called "financial, insurance, and capital management professional services." Keeping those costs under control may yield some price concessions for shippers. In any case, we forecast rail transportation tags to rise 7.8% in 2011, before falling 1.4% in 2012.


Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
The Internet of Things and the Modern Supply Chain
Learn today how the internet of things is transforming supply chain operations.
Download Today!
From the February 2017 Issue
As the new administration sends waves of uncertainly through the global trade community, this could be the best time ever for shippers to build an investment case for GTM. Here are five trends you need to watch if you’re about to put these savvy systems to work
Carrier Consolidation Keeps Shippers Guessing
Getting Value from the Cloud
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Advance your career with the fastest growing logistics certification – APICS CLTD
During this webcast presenters will give an overview of APICS and the new Certified in Logistics, Transportation and Distribution (CLTD) designation. Learn how the CLTD program can help you stay on top of current trends and advance your career.
Register Today!
EDITORS' PICKS
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...

Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...