July Freight Cost Report

(Nulogx)

Results published [last week] by the Canadian General Freight Index (CGFI) indicate that the trend of increasing ground transportation rates continued through the July 2010 period.

Overall Freight Costs increased by 3% in July when compared to June. Base Rates, which exclude the impact of Fuel Surcharges assessed by carriers, also increased by 3.2% while Average Fuel Surcharges decreased slightly 13.42% of Base Rates to 13.13% during the same period.

"The information provided by the CGFI continues to indicate that we reached a floor in transportation costs for Canadian Shippers in April of this year, says Doug Payne, President of Nulogx. Since then we have seen 3 consecutive months of increases, led primarily by activity in both the Domestic and Transborder Truckload sectors".

Click here to view July's results.

Integrators Increase North America Rates

(International Freighting Weekly – Damian Brett & Katerina Kerr)

UPS and FedEx push up cost of shipments

UPS and FedEx have both announced plans to increase rates in North America over the coming months.

UPS Freight, one of the largest less-than-truckload (LTL) carriers in the US, has announced a general rate increase of an average 5.9% for non-contractual shipments in the US, Canada and Mexico. The rate adjustment will take effect on 18 October, and will apply to minimum charge, LTL rates and associated charges. Read more here.

TL Rates Up, LTL Flat: Canadian General Freight Index

(Truck News)

Truckload rates are on the rise while LTL rates remain flat, according to the latest edition of the Canadian General Freight Index. The index measures the cost of ground transportation rates for Canadian shippers. The latest edition, released yesterday, includes April.

“The results show a definite increase in truckload rates – which is consistent with what we are seeing in the industry,” says Dr. Alan Saipe, president of Supply Chain Surveys. “Less than truckload appears to be staying flat.”

Overall freight costs rose 3.9% in April compared to March. Base rates, excluding fuel surcharges, increased 3.9% with average fuel surcharges decreasing by 1.4%.

“While we are seeing a clear increase in demand for truckload capacity, it is still too early to know for sure if the price increases seen in April is the start of an upward trend,” says Doug Payne, president of Nulogx.

Canadian Transportation Rates Take Step Back in March

(Canadian Transportation & Logistics)

The latest results from the Canadian General Freight Index show the cost of ground transportation for Canadian shippers decreased slightly in March, erasing February's gains.

Overall freight costs dropped 2.6% in March, according to the index. Base rates, excluding fuel surcharges, decreased 1.9% with average fuel surcharges dropping 4.5% from the prior month.

The Canadian General Freight Index is compiled by Nulogx. More info is available here.

Transportation Rates Are On the Rise for All Modes

(Logistics Today – Dave Blanchard)

As the economy slowly inches its way back to something resembling a recovery, the logistics industry is seeing a recovery of its own, one that will see manufacturers take a modest hit to the wallets as rates for motor carriers, railroads and intermodal transportation increase over the next six months.

According to FreightPulse 18, a semi-annual survey of preferred transportation modes conducted by equity research firm Morgan Stanley with Logistics Today, it’s expected that those shippers using rail carriers to move their freight will see a 2.5% hike in their rates through the end of 2010. Even so, rail carriers will see a 2.6% increase in the amount of goods shipped this year. Rail is generally the least expensive mode of domestic transportation, and volume growth is expected to be comparable to the 2003/2004 rebound. […]

• Rail rate increase 2.5%, volume increase 2.6%
• Intermodal rate increase 0.9%, volume increase 2.1%
• Truckload rate increase 0.6%, volume increase 2.7%
• Regional LTL rate increase 0.7%, volume increase 2.1%
• National LTL rate increase 0.7%, volume increase 1.5%

Read more here.

Source: Freight Pulse 18, conducted by Morgan Stanley with Logistics Today. Forecasts reflect expectations for freight rate and volume increases in the second half of 2010.

Freight Rates Back to 2007 Peak Levels

(Port News/Cargonews Asia)

Freight rates for container shipping trade lanes between Asia and Europe have returned to their peak levels of 2007 as exports gain strength and shipping companies control capacity over the route, reported the South China Morning Post.

Coscon, the largest shipping company on the mainland, said rates had increased to US$1,400 per TEU, plus a $510 bunker adjustment charge. Rates per FEU rose to $2,650, in addition to $1,020 in bunker charges.

"The market leaders such as Maersk and MSC have urged the industry to keep a balance between supply and demand, and most of the players have reacted positively to keep [control of] capacity," said an official from China Cosco, the parent of Coscon.

Coscon has kept 40,000 TEUs of capacity, or about 10 vessels at "hot lay-up", meaning idling the vessels outside the ports.

About 10 per cent of the global fleet is idled across the globe. Read more here.

Turnabout on the Atlantic: As Volumes Soar, Exporters Pay More

(Shipping Digest – Peter T. Leach)

Freight rates on imports fall as volumes drop

The dramatic decline of the U.S. dollar against the currencies of its major trading partners in Europe over the last year continues to drive the reversal of fortune on the trans-Atlantic trade lanes, as U.S. products become more competitive in Europe, while European products grow more expensive in the U.S.

Eastbound ships are stacked to capacity with containers filled with U.S. goods bound for Europe, while westbound ships are only running a little more than 80% full. But the dollar’s decline appears to be leveling off, as major European economies stutter and the euro and the pound begin to lose steam. That could stem the decline in U.S. imports in the next year and slow U.S. export growth, but forecasters’ crystal balls are still a bit murky on this point.

The space shortage has eased a bit this month because much of Europe is on vacation. “So there’s not a lot of cargo moving in mid-August,” said Ron Bailey, manger of Brewster Lines, a St. Louis-based non-vessel-operating common carrier. In addition, the dollar has been getting stronger – on August 13, the exchange rate was $1.49 to the euro, compared to $1.59 at its weakest point.

“That’s starting to take a hit. So as a result, there’s more space available, more equipment, less demand,” Bailey said. That translates into shorter waiting times, but shippers may have to wait several weeks for a booking, depending on the origin and destination ports.

Beset by declining volumes and freight rates on the westbound leg of the trade in the first few months of the year, carriers have largely completed the reductions in vessel capacity they thought necessary to stabilize rates. They expect no further cuts. But even in the face of tight capacity on the eastbound, or backhaul leg, and expectations of some improvement in westbound volumes by the fourth quarter, carriers don’t plan to add capacity. Carriers plan further rate increases in the eastbound trade where demand is strong and supply is limited. Read the complete article.