Pricing Across Transportation Modes - January 2011


January 24, 2011 - LM Editorial





 

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.



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!

Recent Entries

As of July 1, only containers with a verified gross mass will be cleared to be loaded onto a ship under the International Maritime Organization’s Safety of Life at Sea (SOLAS) Verified Gross Mass (VGM) amendment. Shippers hoping that the implementation of the ruling will be delayed or deferred are whistling in the dark, say industry analysts.

Amid the many worrisome economic indicators kicking around of late, something along the lines of good news came about this week in the form of United States new home sales data, issued by the United States Department of Commerce this week.

In March, the SCI came in at 0.4, which FTR described as “a near neutral reading” on the heels of four months of more favorable market trends for shippers.

The $4.8 billion acquisition of Netherlands-based TNT Express-NV, a provider of mail and courier services and the fourth largest global parcel operator, by transportation and logistics services provider FedEx was made official today.

less than one percent of all U.S. businesses export, and of those that do, the majority interacts only with NAFTA trading partners Mexico and Canada.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA