Transportation pricing trends - August 2011

By Staff
August 01, 2011 - LM Editorial





 

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!

Recent Entries

Seasonally-adjusted (SA) for-hire truck tonnage in November was up 3.5 percent compared to October, which was up 0.5 percent over September at 136.8 (2000=100), marking the highest SA on record.

UPS said that through this acquisition it will augment its healthcare expertise and network in Europe, specifically in the fast growing healthcare markets in Central and Eastern Europe.

Carloads were up 12.1 percent at 312,271, and intermodal at 280,337 containers and trailers saw a 4.5 percent annual gain.

Total November POLB volumes were up 2.1 percent year-over-year at 581,514 TEU, and POLA volumes in November decreased 3 percent compared to November 2013 at 663,346 TEU.

When railroads are doing business with a larger than large customer like UPS, it stands to reason, it can often be the best, and worst, of both worlds, depending on how things are going. That was one of the main takeaways from a presentation by UPS Vice President of Corporate Transportation Services Ken Buenker at this year’s RailTrends conference in New York.

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA