Trucking company executives, without saying it implicitly, are warning shippers of higher rates:

Trucking executives sounded a clear warning about rising costs Tuesday at the National Industrial Transportation League’s Freight Policy Forum in Washington, D.C.

From driver wages to fuel and tractor prices to health insurance premiums, costs are rising at a steady pace, putting pressure on carrier margins and shipper budgets.

Shippers could face much higher transportation costs if the economic recovery picks up its pace, those carrier executives warned, as higher demand meets tight capacity.

“We’re facing a lot of headwinds in all areas of cost,” said Dan England, chairman of $1 billion truckload carrier C.R. England. “Driver costs, fuel costs, the cost of regulation.”

“Insurance costs are going up, not just for vehicles but health insurance,” said Rob Estes, Jr., president of Estes Express Lines, a $1.9 billion less-than-truckload carrier.

The health insurance premiums paid by Estes have risen 10 percent over five years, he told shippers at the NITL forum. The Richmond, Va., carrier is also raising pay.

“We gave our first pay raise in four years Jan. 1, a 2.5 percent pay increase,” Estes said. “We’re still behind the loop. We’ll have to look pretty aggressively at it this year.”

Again, there were no direct words other than saying costs would have to be “passed on.” Clearly, freight shippers will be looking at higher freight rates as the year goes on.

From Logistics Management:

Rail carload and intermodal volumes were again mixed for the week ending April 7, according to data from the Association of American Railroads (AAR).

Carload volume—at 270,974—was down 7.7 percent annually and below the week ending March 31 at 286,962 and the week ending March 24 at 278,393, as well as the week ending March 17 at 278,420.

Eastern carloads were down 5.2 percent, and out west carloads were down 9.3 percent.

Read more at Logistics Management.

A new service from UPS will make it easier and less expensive for companies to move freight to Mexico:

UPS CrossBorder Connect is a lower-priced alternative to air freight and will ensure that your material arrives at your destination south of the border in two to four days depending on the origin and final location.

The service will be attractive for those companies that need to expedite heavyweight freight across the border. The service utilizes the trucking network that supports UPS’s North American Air Freight service. That network has been connected with trusted carriers in Mexico at eight important points along the border.

The biggest benefit will probably be UPS’s willingness to assist with the paperwork involved with this process.

From TruckingInfo.com:

The amount of freight carried by the for-hire transportation industry rose 0.5% in February from January, rising after a one-month decline, according to the Bureau of Transportation Statistics’ Freight Transportation Services Index.

It appears to be a part of an overall trend despite some up and down over the last several months:

Shipments in February 2012 were at the second highest level since the early recession month of April 2008 despite the 3% decline from December 2011 (113.7 on the index), which was the highest level in the 22-year history of the series. After dipping to a recent low in April 2009 (94.3), freight shipments increased in 23 of the last 34 months, rising 16.9% during that period.

The Freight Rate Company has the capability of meeting the demand with cheap shipping rates and a database of top notch carriers. As freight shipments continue to increase, make sure you are getting the best freight rates.

A story from the Journal of Commerce should give both shippers and truckers cause for concern:

A California man who pleaded guilty to a scheme that defrauded truckers and freight brokers was sentenced to more than 10 years in federal prison Tuesday.

U.S. District Judge Lawrence K. Karlton sentenced Kulwant Singh Gill to 10 years and 10 months in prison, followed by three years of supervised release.

Karlton ordered Gill to pay $443,388 to the victims of his scheme, in which he accepted shipments as a trucker and then brokered them to actual carriers.

The 10-year, 10-month sentence is one of the toughest handed down for this type of fraud, which logistics industry officials say is rampant and hard to prosecute.

“The transportation industry is ripe with fraud,” said Robert Voltmann, president and CEO of the Transportation Intermediaries Association. The sentencing is a “positive sign,” he said.

The scam basically works this way:

Joe Smith pretends to be ‘ABC Trucking.’ He has a company name, a phone number, perhaps even a website. He is contacted by Johnson Brokers to move a load from New Jersey to Texas. However, Smith doesn’t actually operate a trucking company. He turns around and brokers the same load to XYZ Trucking. Is that illegal? Actually, it’s not. The fraud comes when Joe Smith collects payment from Johnson Brokers but fails to pay XYZ Trucking.

As the JOC article states, it is hard to prosecute such criminal activity because “Joe Smith” can do the scam for awhile and then set up shop as a different company somewhere else and conduct the same scam before anybody is even on to it.

This kind of thing affects the entire industry. It results in higher insurance rates, it tarnishes reputations and it could also lead to higher freight rates. Most trucking companies in the United States are small, independently owned firms. They rely on week to week cash flow to continue operating. Non-payment can easily put them out of business. This results in less options for shippers, which leads to higher freight rates.

If you’re a shipper and you are looking for a freighting company to move your freight, check them out. Make sure they are checking out the trucking companies they work with and are not just promising cheap shipping rates in order to close the deal.

From Transport Topics:

U.S. intermodal traffic increased 2% for the week ended Saturday from a year ago, the Association of American Railroads said.

This can be important news:

Intermodal traffic, which tends to be higher-valued merchandise than bulk commodities, uses trains for the long haul and trucks for the shorter distance at either end of the trip.

It remains to be seen whether this is a short term blip or a long term shipping trend.