Tailgating a 1.7% price jump in April, LTL trucking revved its engine with another 1.2% price increase in May. These were the first back-to-back monthly price hikes since November-December. More significantly, LTL prices now stand higher than same-month-year-ago levels. Reversing the 1.5% price decline set last year, LTL prices are fore¬cast to increase 1.5% in 2016 and 2% in 2017. Truckload prices, meanwhile, continue to sputter—down 1% in May. Compared to a year ago, TL tags have been falling for 17 consecutive months and now sit 6.8% below May 2014. Looking ahead, TL prices are forecast to decline 2.7% in 2016 and then rebound 1.7% in 2017.
U.S.-owned airliners have endured price cuts in its passenger business, but cargo rates are holding up better, at least according to the latest monthly surveys. In May, overall airliner prices declined 3.2% while prices were up 2.9% for airfreight service on scheduled flights and up 1.2% for freight on nonscheduled flights. One month does not a trend make, so we examine moving averages of monthly prices. With this perspective, we see airfreight prices (for scheduled services) trending to its nadir in June 2016 before climbing thereafter. Our inflation model for scheduled airfreight continues to project average prices will gain 0.5% in 2016 and then increase 2.9% in 2017.
While the United States continues its economic recovery, freight volumes have not been strong enough to support price hikes by domestic waterborne freight trans¬portation providers. In fact, in the latest quarterly review (three months ending May 2016 compared to a year ago), we see average transaction prices for deep sea freight down 11.8%, coastal and intercoastal freight down 4.7%, inland waterways down 4.3%, and Great Lakes down 4.2%. Adding it all up: The price index for the U.S. water transportation industry is down 6.6%. We forecast average annual prices in this industry to decline 4.8% this year and increase 2.4% next year.
Starting in the autumn of 2014, average transaction prices in the railroad industry have declined for seven consecutive quarters. It appears now that the price-cut track finally will be taking a new route. Intermodal rail operators are leading the way, reporting a 0.6% price increase in May and a whopping 4.1% price jump in April. Carload operators also reported a 0.2% price cut in May following a 0.6% hike in April. If the rail price data survives revisions from more detailed survey responses, then we expect the rail industry will be set¬ting itself up for a return to price increases in 2017. The fore¬cast for the entire rail transportation industry calls for prices to decline 2.6% in 2016 before increasing 1.6% in 2017.