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

Join Transplace for this Webcast, to learn how they were able to automate manual processes by tightly integrating their transportation management system (TMS) with the portals of carriers, and 3rd party vendors in a matter of a few weeks.

Following the integration, the new Hapag-Lloyd will rank among the four largest ocean cargo carriers in the world

AgTC will provide unique market intelligence at next annual meeting in San Francisco this June

With no fuel tax increase likely ahead of this year’s mid-term elections, trucking interests in Washington are moving to Plan B in their attempt to shore up funding for badly needed infrastructure improvements.

Crowley Maritime Corporation has acquired majority ownership of Accord Ship Management (HK) Limited and Accord Marine Management Pvt. Ltd.

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