2001 Transportation Outlook.

TIME TO DUST OFF THE CRYSTAL BALL AND PROVIDE A PICTURE OF WHAT THE FUTURE holds for the transportation industry. While it's impossible to guess--er, forecast--all that will transpire during the next 12 months, the key issues in 2001 are the following:

FUEL & OIL PRICES

Picking lottery numbers would be a safer bet than trying to divine what fuel and gas prices will be this year. Experts said throughout 2000 that prices had to decrease some time, but prices rose by a third during the first three quarters of the year Oil company executives say prices in early 2001 should fall from about US$32 a barrel to a range of $22 to $28 per barrel--but don't hold your breath.

CARGO RATES

Cargo rates will remain high as long as fuel prices do. Airlines and ocean carriers started with surcharges early in 2000 to account for the higher fuel costs. Don't expect any cuts there until fuel prices come down to the levels of more than a year ago. Ocean shipping rates, which have risen by a third in some trade lanes, will continue to hold strong. Consolidations and mergers have led to fewer ships and services and less ship space. And trade is strong again in the region, which means there's a better than even chance that rates will rise about 10%.

STRIKES

Labor unrest threw a wrench into the logistics chain during 2000 in Brazil, Argentina and numerous other countries across the region. Expect more of the same as workers lose their jobs to privatization and the push for increased productivity continues. Trouble seems to be brewing on the waterfronts of Brazil and Chile, while increased trade may clog Argentine and Brazilian highways.

ON THE HORIZON

Investments are being planned for the Panama Canal, which continues to see more Asian trade bound for U.S. eastern seaboard ports. In Costa Rica, they keep talking about a dry canal plan using high-speed rails and high-tech ports, but shipping line execs say they'll believe it when they see it.

More investments are also planned for railroads throughout the region. But, while cargo volume is on the rise, profits are not and efficiency is still elusive. The same goes for river transportation in the Southern Cone and northern Brazil, where hopes are high but bank accounts are low.