Shippers expect transportation costs to rise

Shippers expect transportation costs to rise

FORT LAUDERDALE, Fla. -- Several National Industrial Transportation League members say they expect their transportation costs to rise by 2 percent to 3 percent next year.

"On any given lanes, our assumption is that costs will go up," said Curt Warfel of Eka Chemicals. "Costs will definitely go up," said Mark Maleski, international logistics manager for JC Penney.

Several factors will combine to drive up rates, the shippers said. They include new federal rules limiting hours of service for truck drivers, driver shortages, tight capacity on railroads, and economic recovery that is boosting transportation demand.

"Capacity is going to be extremely challenged by hours of service," said John Ficker, president of the NIT League, which is holding its annual meeting this week.

The league's chairman, Tom Pellingham of David J. Joseph Co., said railroads continue to battle capacity problems. He offered faint praise for recent railroad service improvements. "In a rising peak transportation period, if things aren't getting any worse, then they're really making progress," he said.

And Ficker noted that many shippers aren't equipped for rail service. "Even though the railroads want to carry more freight, there are very few retailers who have rail on site," he said "The truck really delivers the goods."

Maleski said delivery hours need to be lengthened to accommodate rising volume. "You just can't get the job done Monday through Friday from 9 to 5," he said. "What's the answer? More hours. Will costs go up? Definitely. This has been a good year. There hasn't been too much backup at the gate. But we'll have to see more hours to keep up with the movement."