Logistics Pricing Analysis: Regional City Pair Trending

This post is based on material from the 2013 Spend Matters / Procurian research brief: Summer 2013 – Logistics Pricing Review and Outlook (free, registration required). Contributors from Procurian include Ed Sands, Global Practice Lead-Logistics and Scott Youngs, Logistics Category Management Group Leader. Spend Matters contributors include Jason Busch, Executive Editor, and Pierre Mitchell, Chief Research Officer.

Exploring regional city price trending for logistics is helpful in understanding overall market dynamics – and in developing overall integrated, transportation sourcing, network, and supply chain strategies. In the above linked analysis, we explore a number of regional price trending city pairs (e.g., Northeast-Northeast, South-South, Midwest-Northeast, South-Midwest, South-Northwest, etc.) on a quarterly basis going back to Q4 2012.

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The information is based on CPM data and whether the region pair was higher than the market average change (and therefore a cost pressure), lower than the market average change, or comparable. In the full brief (downloadable via the above link), we offer a single chart showing this analysis.

For example, the Northeast-Northeast pair recorded a higher than market change between October and December 2012, but a lower than market change in Q1 and Q2 of this year. Contrast this with the West-West city pair, which had a higher than market change in the most recent spring 2013 quarter, but a lower than market change the previous quarters.

The current situation translates into an environment where the flat rates we saw in the summer are expected to continue through the remainder of the year. As usual per seasonal trending, fuel pricing will likely moderate in the back half of 2013. From a pricing perspective, it is also worth considering the general mode shifts from truckload/LTL to intermodal in this environment. Some in the market believe that intermodal will lower pricing just enough to gain more market share. This would represent rate pressure that truckers would have to respond to.

For further analysis of this topic, download the complete Spend Matters and Procurian research brief today: Summer 2013 – Logistics Pricing Review and Outlook.

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